UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6102
MFS SERIES TRUST VI
(Exact name of registrant as specified in charter)
111 Huntington Avenue, Boston, Massachusetts 02199
(Address of principal executive offices) (Zip code)
Christopher R. Bohane
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, Massachusetts 02199
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: October 31
Date of reporting period: April 30, 2022
| ITEM 1. | REPORTS TO STOCKHOLDERS. |
Item 1(a):
Semiannual Report
April 30, 2022
MFS® Global Equity Fund
LGE-SEM
MFS® Global
Equity Fund
CONTENTS
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back cover |
The
report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED • MAY LOSE VALUE
• NO BANK GUARANTEE
LETTER FROM THE CHAIR AND
CEO
Dear Shareholders:
Global markets have recently been buffeted by a series of
crosscurrents, including rising inflation, tighter financial conditions, the continued spread of the coronavirus (particularly in Asia), and the evolving geopolitical landscape in the wake of Russia’s invasion of Ukraine. Consequently, at a
time when global growth faces multiple headwinds, central banks have been presented with the challenge of reining in rising prices without tipping economies into recession. The US Federal Reserve has hiked rates at consecutive meetings for the first
time since 2006 and raised rates by more than 0.25% for the first time since 2000. Additional half-point hikes are expected at the Fed’s next two meetings as it seeks to adopt a neutral monetary policy stance before the end of the year. Richly
valued growth equities have been hit particularly hard by higher interest rates, and volatility in credit markets has picked up too.
There are, however, encouraging signs for
the markets. The number of coronavirus cases outside of Asia remains well below prior peaks, and fewer are seriously ill. Meanwhile, unemployment is low and there are signs that some global supply chain bottlenecks are beginning to ease, though
lockdowns in China and disruptions stemming from Russia’s invasion of Ukraine could hamper these advances. Additionally, easier Chinese monetary and regulatory policies and the record pace of corporate stock buybacks are supportive elements,
albeit in an otherwise turbulent investment environment.
It is important to have a deep understanding of company
fundamentals during times of market transition, and we have built our global research platform to do just that.
At MFS®, we put our clients’ assets to work responsibly by carefully navigating increasingly complex global capital markets. Our investment team, guided by a commitment to
long-term fundamental investing, seeks to uncover what we believe are the best, most durable investment ideas in markets around the world. The result — combining collective expertise, long-term discipline, and thoughtful risk management
— is what we consider to be a unique global investment platform that enables us to create value for investors.
Respectfully,
Michael W.
Roberge
Chair and Chief Executive Officer
MFS Investment Management
June 15, 2022
The opinions expressed in this letter are subject to change
and may not be relied upon for investment advice. No forecasts can be guaranteed.
1
Portfolio Composition
| (g) | The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. (“S&P Global Market Intelligence”). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS. |
2
Portfolio Composition -
continued
| (o) | Less than 0.1%. |
| (x) | Represents the portfolio’s exposure to issuer countries as a percentage of a portfolio’s net assets. For purposes of this presentation, United States includes Cash & Cash Equivalents and Other. |
| (y) | Represents the portfolio’s exposure to a particular currency as a percentage of a portfolio's net assets. For purposes of this presentation, United States Dollar includes Cash & Cash Equivalents. |
Cash & Cash Equivalents includes any cash, investments in
money market funds, short-term securities, and other assets less liabilities. Please see the Statement of Assets and Liabilities for additional information related to the fund’s cash position and other assets and liabilities.
Other includes equivalent exposure from currency derivatives
and/or any offsets to derivative positions and may be negative.
Percentages are based on net assets as of April 30, 2022.
The portfolio is actively managed and current holdings may be
different.
3
Expense Table
Fund expenses borne by the shareholders during the period,
November 1, 2021 through April 30, 2022
November 1, 2021 through April 30, 2022
As a
shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and
other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period November 1, 2021 through April 30, 2022.
Actual Expenses
The first line for each share class in the following table
provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000
(for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during
this period.
Hypothetical Example for Comparison
Purposes
The second line for each share class in the
following table provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual
return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Expense Table -
continued
| Share
Class |
Annualized
Expense Ratio |
Beginning
Account Value 11/01/21 |
Ending
Account Value 4/30/22 |
Expenses
Paid During Period (p) 11/01/21-4/30/22 | |
| A | Actual | 1.13% | $1,000.00 | $872.66 | $5.25 |
| Hypothetical (h) | 1.13% | $1,000.00 | $1,019.19 | $5.66 | |
| B | Actual | 1.88% | $1,000.00 | $869.22 | $8.71 |
| Hypothetical (h) | 1.88% | $1,000.00 | $1,015.47 | $9.39 | |
| C | Actual | 1.88% | $1,000.00 | $869.36 | $8.71 |
| Hypothetical (h) | 1.88% | $1,000.00 | $1,015.47 | $9.39 | |
| I | Actual | 0.88% | $1,000.00 | $873.56 | $4.09 |
| Hypothetical (h) | 0.88% | $1,000.00 | $1,020.43 | $4.41 | |
| R1 | Actual | 1.88% | $1,000.00 | $869.27 | $8.71 |
| Hypothetical (h) | 1.88% | $1,000.00 | $1,015.47 | $9.39 | |
| R2 | Actual | 1.38% | $1,000.00 | $871.52 | $6.40 |
| Hypothetical (h) | 1.38% | $1,000.00 | $1,017.95 | $6.90 | |
| R3 | Actual | 1.13% | $1,000.00 | $872.56 | $5.25 |
| Hypothetical (h) | 1.13% | $1,000.00 | $1,019.19 | $5.66 | |
| R4 | Actual | 0.88% | $1,000.00 | $873.55 | $4.09 |
| Hypothetical (h) | 0.88% | $1,000.00 | $1,020.43 | $4.41 | |
| R6 | Actual | 0.79% | $1,000.00 | $874.01 | $3.67 |
| Hypothetical (h) | 0.79% | $1,000.00 | $1,020.88 | $3.96 |
| (h) | 5% class return per year before expenses. |
| (p) | “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
5
Portfolio of
Investments
4/30/22 (unaudited)
The Portfolio of Investments is a complete list of all
securities owned by your fund. It is categorized by broad-based asset classes.
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – 99.3% | ||||
| Aerospace & Defense – 3.0% | ||||
| Honeywell International, Inc. | 330,815 | $ 64,016,011 | ||
| MTU Aero Engines Holding AG | 64,441 | 13,032,402 | ||
| Rolls-Royce Holdings PLC (a) | 11,655,898 | 11,902,449 | ||
| $ 88,950,862 | ||||
| Airlines – 0.8% | ||||
| Aena S.A. (a) | 170,263 | $ 24,064,742 | ||
| Alcoholic Beverages – 6.0% | ||||
| Carlsberg Group | 127,143 | $ 16,093,160 | ||
| Diageo PLC | 1,454,292 | 72,067,562 | ||
| Heineken N.V. | 456,893 | 44,562,152 | ||
| Pernod Ricard S.A. | 220,836 | 45,499,901 | ||
| $ 178,222,775 | ||||
| Apparel Manufacturers – 4.0% | ||||
| Burberry Group PLC | 876,373 | $ 17,233,724 | ||
| Compagnie Financiere Richemont S.A. | 333,143 | 38,725,518 | ||
| LVMH Moet Hennessy Louis Vuitton SE | 101,187 | 64,749,114 | ||
| $ 120,708,356 | ||||
| Automotive – 0.4% | ||||
| Aptiv PLC (a) | 114,123 | $ 12,142,687 | ||
| Broadcasting – 2.4% | ||||
| Omnicom Group, Inc. | 103,306 | $ 7,864,686 | ||
| Walt Disney Co. (a) | 379,871 | 42,405,000 | ||
| WPP Group PLC | 1,826,915 | 22,659,689 | ||
| $ 72,929,375 | ||||
| Brokerage & Asset Managers – 2.6% | ||||
| Charles Schwab Corp. | 678,313 | $ 44,992,501 | ||
| Deutsche Boerse AG | 89,977 | 15,775,910 | ||
| London Stock Exchange Group PLC | 160,279 | 15,903,971 | ||
| $ 76,672,382 | ||||
| Business Services – 10.0% | ||||
| Accenture PLC, “A” | 257,860 | $ 77,450,830 | ||
| Adecco S.A. | 202,889 | 7,851,248 | ||
| Brenntag AG | 186,973 | 14,584,455 | ||
| Cognizant Technology Solutions Corp., “A” | 454,140 | 36,739,926 | ||
| Compass Group PLC | 1,045,051 | 22,012,522 | ||
6
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Business Services – continued | ||||
| Equifax, Inc. | 178,954 | $ 36,420,718 | ||
| Fidelity National Information Services, Inc. | 437,171 | 43,345,505 | ||
| Fiserv, Inc. (a) | 469,974 | 46,019,854 | ||
| PayPal Holdings, Inc. (a) | 149,775 | 13,169,716 | ||
| $ 297,594,774 | ||||
| Cable TV – 2.5% | ||||
| Comcast Corp., “A” | 1,879,004 | $ 74,709,199 | ||
| Chemicals – 2.2% | ||||
| 3M Co. | 242,533 | $ 34,978,109 | ||
| PPG Industries, Inc. | 249,635 | 31,950,784 | ||
| $ 66,928,893 | ||||
| Computer Software – 2.5% | ||||
| Check Point Software Technologies Ltd. (a) | 226,941 | $ 28,660,379 | ||
| Oracle Corp. | 634,039 | 46,538,462 | ||
| $ 75,198,841 | ||||
| Computer Software - Systems – 1.3% | ||||
| Cisco Systems, Inc. | 216,993 | $ 10,628,317 | ||
| Samsung Electronics Co. Ltd. | 502,619 | 26,706,215 | ||
| $ 37,334,532 | ||||
| Construction – 0.5% | ||||
| Otis Worldwide Corp. | 214,080 | $ 15,593,587 | ||
| Consumer Products – 4.8% | ||||
| Colgate-Palmolive Co. | 357,486 | $ 27,544,296 | ||
| Essity AB | 1,687,848 | 44,862,831 | ||
| International Flavors & Fragrances, Inc. | 220,274 | 26,719,236 | ||
| Reckitt Benckiser Group PLC | 559,753 | 43,667,266 | ||
| $ 142,793,629 | ||||
| Electrical Equipment – 4.5% | ||||
| Amphenol Corp., “A” | 271,171 | $ 19,388,727 | ||
| Legrand S.A. | 377,181 | 33,294,601 | ||
| Schneider Electric SE | 565,630 | 80,559,309 | ||
| $ 133,242,637 | ||||
| Electronics – 0.9% | ||||
| Hoya Corp. | 133,900 | $ 13,340,359 | ||
| Microchip Technology, Inc. | 223,900 | 14,598,280 | ||
| $ 27,938,639 | ||||
7
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Food & Beverages – 4.3% | ||||
| Danone S.A. | 828,929 | $ 49,833,105 | ||
| Nestle S.A. | 603,137 | 77,868,289 | ||
| $ 127,701,394 | ||||
| Gaming & Lodging – 1.1% | ||||
| Marriott International, Inc., “A” | 120,320 | $ 21,359,206 | ||
| Whitbread PLC (a) | 350,746 | 12,158,934 | ||
| $ 33,518,140 | ||||
| Insurance – 2.7% | ||||
| Aon PLC | 139,551 | $ 40,189,293 | ||
| Willis Towers Watson PLC | 191,657 | 41,179,423 | ||
| $ 81,368,716 | ||||
| Internet – 0.8% | ||||
| eBay, Inc. | 483,535 | $ 25,105,137 | ||
| Machinery & Tools – 1.3% | ||||
| Carrier Global Corp. | 183,164 | $ 7,009,686 | ||
| Kubota Corp. | 1,884,200 | 32,091,587 | ||
| $ 39,101,273 | ||||
| Major Banks – 3.1% | ||||
| Erste Group Bank AG | 296,196 | $ 9,149,948 | ||
| Goldman Sachs Group, Inc. | 165,643 | 50,602,280 | ||
| UBS AG | 1,896,177 | 32,080,342 | ||
| $ 91,832,570 | ||||
| Medical Equipment – 14.6% | ||||
| Abbott Laboratories | 407,570 | $ 46,259,195 | ||
| Boston Scientific Corp. (a) | 1,134,369 | 47,768,279 | ||
| Cooper Cos., Inc. | 80,793 | 29,169,505 | ||
| EssilorLuxottica | 69,525 | 11,794,685 | ||
| Medtronic PLC | 792,522 | 82,707,596 | ||
| Olympus Corp. | 593,100 | 10,505,177 | ||
| Sonova Holding AG | 29,586 | 10,652,664 | ||
| Stryker Corp. | 219,884 | 53,049,214 | ||
| Thermo Fisher Scientific, Inc. | 180,058 | 99,557,669 | ||
| Waters Corp. (a) | 82,836 | 25,100,965 | ||
| Zimmer Biomet Holdings, Inc. | 170,061 | 20,534,866 | ||
| $ 437,099,815 | ||||
8
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Other Banks & Diversified Financials – 5.2% | ||||
| American Express Co. | 241,414 | $ 42,177,440 | ||
| Grupo Financiero Banorte S.A. de C.V. | 1,116,800 | 7,372,363 | ||
| Julius Baer Group Ltd. | 215,567 | 10,307,636 | ||
| Visa, Inc., “A” | 448,254 | 95,536,375 | ||
| $ 155,393,814 | ||||
| Pharmaceuticals – 5.4% | ||||
| Bayer AG | 592,676 | $ 39,064,874 | ||
| Merck KGaA | 216,405 | 40,131,326 | ||
| Roche Holding AG | 220,201 | 81,555,107 | ||
| $ 160,751,307 | ||||
| Printing & Publishing – 0.2% | ||||
| Wolters Kluwer N.V. | 49,289 | $ 4,985,593 | ||
| Railroad & Shipping – 4.8% | ||||
| Canadian National Railway Co. | 437,887 | $ 51,504,269 | ||
| Canadian Pacific Railway Ltd. | 853,481 | 62,491,879 | ||
| Union Pacific Corp. | 126,564 | 29,652,679 | ||
| $ 143,648,827 | ||||
| Specialty Chemicals – 4.7% | ||||
| Akzo Nobel N.V. | 352,068 | $ 30,376,362 | ||
| L'Air Liquide S.A. | 174,226 | 30,078,896 | ||
| Linde PLC | 201,078 | 64,213,368 | ||
| Linde PLC | 53,086 | 16,560,709 | ||
| $ 141,229,335 | ||||
| Specialty Stores – 0.3% | ||||
| Hermes International | 7,677 | $ 9,445,814 | ||
| Telecommunications - Wireless – 1.4% | ||||
| Liberty Broadband Corp. (a) | 380,954 | $ 42,598,276 | ||
| Trucking – 1.0% | ||||
| United Parcel Service, Inc., “B” | 170,201 | $ 30,632,776 | ||
| Total Common Stocks (Identified Cost, $1,688,779,081) | $ 2,969,438,697 | |||
| Strike
Price |
First
Exercise |
|||
| Warrants – 0.0% | ||||
| Apparel Manufacturers – 0.0% | ||||
| Compagnie Financiere Richemont S.A. (1 share for 2 warrants, Expiration 12/04/23) (a) (Identified Cost, $0) | CHF 67.00 | 11/20/23 | 846,954 | $ 600,769 |
9
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Investment Companies (h) – 0.5% | ||||
| Money Market Funds – 0.5% | ||||
| MFS Institutional Money Market Portfolio, 0.28% (v) (Identified Cost, $13,253,213) | 13,253,213 | $ 13,253,213 | ||
| Other Assets, Less Liabilities – 0.2% | 7,035,250 | |||
| Net Assets – 100.0% | $2,990,327,929 | |||
| (a) | Non-income producing security. | |||
| (h) | An affiliated issuer, which 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. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $13,253,213 and $2,970,039,466, respectively. | |||
| (v) | Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end. |
| Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below: | |
| CHF | Swiss Franc |
See Notes to Financial
Statements
10
Financial Statements
Statement of Assets and Liabilities
At 4/30/22 (unaudited)
This statement represents your fund’s balance sheet,
which details the assets and liabilities comprising the total value of the fund.
| Assets | |
| Investments in unaffiliated issuers, at value (identified cost, $1,688,779,081) | $2,970,039,466 |
| Investments in affiliated issuers, at value (identified cost, $13,253,213) | 13,253,213 |
| Receivables for | |
| Investments sold | 3,334,978 |
| Fund shares sold | 3,881,897 |
| Interest and dividends | 11,736,597 |
| Other assets | 44,824 |
| Total assets | $3,002,290,975 |
| Liabilities | |
| Payable to custodian | $31,065 |
| Payables for | |
| Investments purchased | 8,238,882 |
| Fund shares reacquired | 2,606,000 |
| Payable to affiliates | |
| Investment adviser | 186,714 |
| Administrative services fee | 4,244 |
| Shareholder servicing costs | 679,440 |
| Distribution and service fees | 26,238 |
| Payable for independent Trustees' compensation | 13,216 |
| Accrued expenses and other liabilities | 177,247 |
| Total liabilities | $11,963,046 |
| Net assets | $2,990,327,929 |
| Net assets consist of | |
| Paid-in capital | $1,515,189,332 |
| Total distributable earnings (loss) | 1,475,138,597 |
| Net assets | $2,990,327,929 |
| Shares of beneficial interest outstanding | 58,527,854 |
11
Statement of Assets and
Liabilities (unaudited) – continued
| Net assets | Shares
outstanding |
Net
asset value per share (a) | |
| Class A | $738,143,829 | 14,658,454 | $50.36 |
| Class B | 10,244,442 | 224,845 | 45.56 |
| Class C | 85,704,199 | 1,983,047 | 43.22 |
| Class I | 1,073,071,096 | 20,669,799 | 51.91 |
| Class R1 | 1,564,071 | 35,190 | 44.45 |
| Class R2 | 29,470,295 | 604,551 | 48.75 |
| Class R3 | 75,624,223 | 1,513,160 | 49.98 |
| Class R4 | 81,879,725 | 1,618,396 | 50.59 |
| Class R6 | 894,626,049 | 17,220,412 | 51.95 |
| (a) | Maximum offering price per share was equal to the net asset value per share for all share classes, except for Class A, for which the maximum offering price per share was $53.43 [100 / 94.25 x $50.36]. On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares. Redemption price per share was equal to the net asset value per share for Classes I, R1, R2, R3, R4, and R6. |
See Notes to Financial Statements
12
Financial Statements
Statement of Operations
Six months ended 4/30/22 (unaudited)
This statement describes how much your fund earned in
investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.
| Net investment income (loss) | |
| Income | |
| Dividends | $26,070,990 |
| Income on securities loaned | 15,290 |
| Dividends from affiliated issuers | 8,238 |
| Foreign taxes withheld | (1,736,293) |
| Total investment income | $24,358,225 |
| Expenses | |
| Management fee | $12,778,468 |
| Distribution and service fees | 1,783,226 |
| Shareholder servicing costs | 1,255,884 |
| Administrative services fee | 240,623 |
| Independent Trustees' compensation | 24,544 |
| Custodian fee | 167,177 |
| Shareholder communications | 78,352 |
| Audit and tax fees | 38,220 |
| Legal fees | 8,851 |
| Miscellaneous | 136,071 |
| Total expenses | $16,511,416 |
| Fees paid indirectly | (69) |
| Reduction of expenses by investment adviser and distributor | (237,682) |
| Net expenses | $16,273,665 |
| Net investment income (loss) | $8,084,560 |
| Realized and unrealized gain (loss) | |
| Realized gain (loss) (identified cost basis) | |
| Unaffiliated issuers | $197,067,704 |
| Foreign currency | (17,709) |
| Net realized gain (loss) | $197,049,995 |
| Change in unrealized appreciation or depreciation | |
| Unaffiliated issuers | $(650,979,188) |
| Translation of assets and liabilities in foreign currencies | (709,621) |
| Net unrealized gain (loss) | $(651,688,809) |
| Net realized and unrealized gain (loss) | $(454,638,814) |
| Change in net assets from operations | $(446,554,254) |
See Notes to Financial
Statements
13
Financial Statements
Statements of Changes in Net Assets
These statements describe the increases and/or decreases in
net assets resulting from operations, any distributions, and any shareholder transactions.
| Six months ended | Year ended | |
| 4/30/22
(unaudited) |
10/31/21 | |
| Change in net assets | ||
| From operations | ||
| Net investment income (loss) | $8,084,560 | $16,523,183 |
| Net realized gain (loss) | 197,049,995 | 186,811,954 |
| Net unrealized gain (loss) | (651,688,809) | 863,637,517 |
| Change in net assets from operations | $(446,554,254) | $1,066,972,654 |
| Total distributions to shareholders | $(184,733,936) | $(81,529,939) |
| Change in net assets from fund share transactions | $(195,836,928) | $(30,794,218) |
| Total change in net assets | $(827,125,118) | $954,648,497 |
| Net assets | ||
| At beginning of period | 3,817,453,047 | 2,862,804,550 |
| At end of period | $2,990,327,929 | $3,817,453,047 |
See Notes to Financial
Statements
14
Financial
Statements
Financial Highlights
The financial highlights table is intended to help you
understand the fund's financial performance for the semiannual period and the past 5 fiscal years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
| Class A |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $60.75 | $45.22 | $45.79 | $41.44 | $43.43 | $36.00 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.09 | $0.17 | $0.25 | $0.42 | $0.40 | $0.27(c) |
| Net realized and unrealized gain (loss) | (7.46) | 16.60 | 0.16(g) | 6.10 | (1.23) | 7.66 |
| Total from investment operations | $(7.37) | $16.77 | $0.41 | $6.52 | $(0.83) | $7.93 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.18) | $(0.23) | $(0.45) | $(0.42) | $(0.29) | $(0.21) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(3.02) | $(1.24) | $(0.98) | $(2.17) | $(1.16) | $(0.50) |
| Net asset value, end of period (x) | $50.36 | $60.75 | $45.22 | $45.79 | $41.44 | $43.43 |
| Total return (%) (r)(s)(t)(x) | (12.73)(n) | 37.58 | 0.83 | 16.67 | (1.99) | 22.28(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.15(a) | 1.14 | 1.16 | 1.17 | 1.16 | 1.17(c) |
| Expenses after expense reductions (f) | 1.13(a) | 1.13 | 1.15 | 1.15 | 1.15 | 1.16(c) |
| Net investment income (loss) | 0.32(a) | 0.29 | 0.55 | 0.98 | 0.91 | 0.68(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $738,144 | $857,804 | $667,074 | $721,141 | $671,000 | $703,516 |
See Notes to Financial
Statements
15
Financial
Highlights – continued
| Class B |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $55.28 | $41.35 | $41.93 | $38.09 | $40.03 | $33.26 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $(0.12) | $(0.23) | $(0.09) | $0.10 | $0.06 | $(0.02)(c) |
| Net realized and unrealized gain (loss) | (6.76) | 15.17 | 0.15(g) | 5.60 | (1.12) | 7.08 |
| Total from investment operations | $(6.88) | $14.94 | $0.06 | $5.70 | $(1.06) | $7.06 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $— | $— | $(0.11) | $(0.11) | $(0.01) | $— |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(2.84) | $(1.01) | $(0.64) | $(1.86) | $(0.88) | $(0.29) |
| Net asset value, end of period (x) | $45.56 | $55.28 | $41.35 | $41.93 | $38.09 | $40.03 |
| Total return (%) (r)(s)(t)(x) | (13.08)(n) | 36.56 | 0.08 | 15.79 | (2.73) | 21.37(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.90(a) | 1.89 | 1.91 | 1.92 | 1.91 | 1.92(c) |
| Expenses after expense reductions (f) | 1.88(a) | 1.87 | 1.90 | 1.91 | 1.90 | 1.91(c) |
| Net investment income (loss) | (0.48)(a) | (0.45) | (0.21) | 0.24 | 0.15 | (0.04)(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $10,244 | $15,166 | $15,902 | $22,592 | $24,726 | $29,043 |
See Notes to Financial
Statements
16
Financial
Highlights – continued
| Class C |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $52.58 | $39.38 | $40.00 | $36.44 | $38.35 | $31.88 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $(0.11) | $(0.22) | $(0.08) | $0.09 | $0.06 | $(0.02)(c) |
| Net realized and unrealized gain (loss) | (6.41) | 14.43 | 0.14(g) | 5.34 | (1.07) | 6.78 |
| Total from investment operations | $(6.52) | $14.21 | $0.06 | $5.43 | $(1.01) | $6.76 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $— | $— | $(0.15) | $(0.12) | $(0.03) | $— |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(2.84) | $(1.01) | $(0.68) | $(1.87) | $(0.90) | $(0.29) |
| Net asset value, end of period (x) | $43.22 | $52.58 | $39.38 | $40.00 | $36.44 | $38.35 |
| Total return (%) (r)(s)(t)(x) | (13.06)(n) | 36.54 | 0.09 | 15.78 | (2.72) | 21.36(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.90(a) | 1.89 | 1.91 | 1.92 | 1.91 | 1.92(c) |
| Expenses after expense reductions (f) | 1.88(a) | 1.87 | 1.90 | 1.91 | 1.90 | 1.91(c) |
| Net investment income (loss) | (0.46)(a) | (0.46) | (0.19) | 0.23 | 0.16 | (0.05)(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $85,704 | $112,939 | $110,351 | $143,769 | $149,669 | $180,446 |
See Notes to Financial
Statements
17
Financial
Highlights – continued
| Class I |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $62.59 | $46.55 | $47.09 | $42.57 | $44.58 | $36.94 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.16 | $0.31 | $0.37 | $0.53 | $0.52 | $0.41(c) |
| Net realized and unrealized gain (loss) | (7.70) | 17.08 | 0.18(g) | 6.27 | (1.27) | 7.83 |
| Total from investment operations | $(7.54) | $17.39 | $0.55 | $6.80 | $(0.75) | $8.24 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.30) | $(0.34) | $(0.56) | $(0.53) | $(0.39) | $(0.31) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(3.14) | $(1.35) | $(1.09) | $(2.28) | $(1.26) | $(0.60) |
| Net asset value, end of period (x) | $51.91 | $62.59 | $46.55 | $47.09 | $42.57 | $44.58 |
| Total return (%) (r)(s)(t)(x) | (12.64)(n) | 37.91 | 1.10 | 16.94 | (1.76) | 22.60(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.90(a) | 0.89 | 0.91 | 0.92 | 0.91 | 0.92(c) |
| Expenses after expense reductions (f) | 0.88(a) | 0.88 | 0.90 | 0.91 | 0.90 | 0.91(c) |
| Net investment income (loss) | 0.57(a) | 0.53 | 0.80 | 1.21 | 1.17 | 1.01(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $1,073,071 | $1,245,750 | $908,819 | $947,284 | $935,292 | $1,070,007 |
See Notes to Financial
Statements
18
Financial
Highlights – continued
| Class R1 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $54.00 | $40.41 | $40.97 | $37.25 | $39.18 | $32.56 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $(0.12) | $(0.23) | $(0.09) | $0.09 | $0.06 | $(0.02)(c) |
| Net realized and unrealized gain (loss) | (6.59) | 14.83 | 0.15(g) | 5.47 | (1.09) | 6.93 |
| Total from investment operations | $(6.71) | $14.60 | $0.06 | $5.56 | $(1.03) | $6.91 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $— | $— | $(0.09) | $(0.09) | $(0.03) | $— |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(2.84) | $(1.01) | $(0.62) | $(1.84) | $(0.90) | $(0.29) |
| Net asset value, end of period (x) | $44.45 | $54.00 | $40.41 | $40.97 | $37.25 | $39.18 |
| Total return (%) (r)(s)(t)(x) | (13.07)(n) | 36.57 | 0.08 | 15.77 | (2.73) | 21.37(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.90(a) | 1.89 | 1.91 | 1.92 | 1.91 | 1.92(c) |
| Expenses after expense reductions (f) | 1.88(a) | 1.87 | 1.90 | 1.91 | 1.90 | 1.91(c) |
| Net investment income (loss) | (0.47)(a) | (0.46) | (0.23) | 0.22 | 0.16 | (0.05)(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $1,564 | $2,081 | $1,556 | $2,485 | $2,538 | $3,411 |
See Notes to Financial
Statements
19
Financial
Highlights – continued
| Class R2 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $58.85 | $43.83 | $44.38 | $40.21 | $42.16 | $34.96 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.01 | $0.02 | $0.13 | $0.31 | $0.28 | $0.18(c) |
| Net realized and unrealized gain (loss) | (7.22) | 16.09 | 0.16(g) | 5.91 | (1.19) | 7.43 |
| Total from investment operations | $(7.21) | $16.11 | $0.29 | $6.22 | $(0.91) | $7.61 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.05) | $(0.08) | $(0.31) | $(0.30) | $(0.17) | $(0.12) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(2.89) | $(1.09) | $(0.84) | $(2.05) | $(1.04) | $(0.41) |
| Net asset value, end of period (x) | $48.75 | $58.85 | $43.83 | $44.38 | $40.21 | $42.16 |
| Total return (%) (r)(s)(t)(x) | (12.85)(n) | 37.22 | 0.59 | 16.36 | (2.24) | 21.97(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.40(a) | 1.39 | 1.41 | 1.42 | 1.41 | 1.42(c) |
| Expenses after expense reductions (f) | 1.38(a) | 1.38 | 1.40 | 1.41 | 1.40 | 1.41(c) |
| Net investment income (loss) | 0.05(a) | 0.04 | 0.30 | 0.76 | 0.66 | 0.45(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $29,470 | $36,791 | $27,772 | $37,042 | $40,944 | $52,489 |
See Notes to Financial
Statements
20
Financial
Highlights – continued
| Class R3 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $60.32 | $44.89 | $45.46 | $41.16 | $43.14 | $35.76 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.09 | $0.16 | $0.24 | $0.41 | $0.39 | $0.28(c) |
| Net realized and unrealized gain (loss) | (7.41) | 16.49 | 0.17(g) | 6.06 | (1.21) | 7.60 |
| Total from investment operations | $(7.32) | $16.65 | $0.41 | $6.47 | $(0.82) | $7.88 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.18) | $(0.21) | $(0.45) | $(0.42) | $(0.29) | $(0.21) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(3.02) | $(1.22) | $(0.98) | $(2.17) | $(1.16) | $(0.50) |
| Net asset value, end of period (x) | $49.98 | $60.32 | $44.89 | $45.46 | $41.16 | $43.14 |
| Total return (%) (r)(s)(t)(x) | (12.74)(n) | 37.60 | 0.83 | 16.65 | (2.00) | 22.29(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.15(a) | 1.14 | 1.16 | 1.17 | 1.16 | 1.17(c) |
| Expenses after expense reductions (f) | 1.13(a) | 1.13 | 1.15 | 1.16 | 1.15 | 1.16(c) |
| Net investment income (loss) | 0.31(a) | 0.29 | 0.54 | 0.97 | 0.90 | 0.70(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $75,624 | $88,285 | $70,852 | $91,019 | $90,003 | $108,852 |
See Notes to Financial
Statements
21
Financial
Highlights – continued
| Class R4 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $61.08 | $45.44 | $45.98 | $41.63 | $43.62 | $36.15 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.16 | $0.30 | $0.36 | $0.54 | $0.51 | $0.38(c) |
| Net realized and unrealized gain (loss) | (7.51) | 16.69 | 0.17(g) | 6.09 | (1.23) | 7.68 |
| Total from investment operations | $(7.35) | $16.99 | $0.53 | $6.63 | $(0.72) | $8.06 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.30) | $(0.34) | $(0.54) | $(0.53) | $(0.40) | $(0.30) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(3.14) | $(1.35) | $(1.07) | $(2.28) | $(1.27) | $(0.59) |
| Net asset value, end of period (x) | $50.59 | $61.08 | $45.44 | $45.98 | $41.63 | $43.62 |
| Total return (%) (r)(s)(t)(x) | (12.64)(n) | 37.94 | 1.09 | 16.93 | (1.75) | 22.61(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.90(a) | 0.89 | 0.91 | 0.92 | 0.91 | 0.92(c) |
| Expenses after expense reductions (f) | 0.88(a) | 0.88 | 0.90 | 0.91 | 0.90 | 0.91(c) |
| Net investment income (loss) | 0.57(a) | 0.53 | 0.80 | 1.25 | 1.16 | 0.96(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $81,880 | $95,164 | $84,424 | $97,861 | $136,066 | $142,713 |
See Notes to Financial
Statements
22
Financial
Highlights – continued
| Class R6 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $62.65 | $46.58 | $47.13 | $42.61 | $44.61 | $36.96 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.18 | $0.36 | $0.41 | $0.59 | $0.54 | $0.41(c) |
| Net realized and unrealized gain (loss) | (7.69) | 17.11 | 0.17(g) | 6.26 | (1.24) | 7.86 |
| Total from investment operations | $(7.51) | $17.47 | $0.58 | $6.85 | $(0.70) | $8.27 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.35) | $(0.39) | $(0.60) | $(0.58) | $(0.43) | $(0.33) |
| From net realized gain | (2.84) | (1.01) | (0.53) | (1.75) | (0.87) | (0.29) |
| Total distributions declared to shareholders | $(3.19) | $(1.40) | $(1.13) | $(2.33) | $(1.30) | $(0.62) |
| Net asset value, end of period (x) | $51.95 | $62.65 | $46.58 | $47.13 | $42.61 | $44.61 |
| Total return (%) (r)(s)(t)(x) | (12.60)(n) | 38.06 | 1.17 | 17.07 | (1.66) | 22.71(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.80(a) | 0.80 | 0.82 | 0.83 | 0.81 | 0.83(c) |
| Expenses after expense reductions (f) | 0.79(a) | 0.78 | 0.81 | 0.82 | 0.80 | 0.82(c) |
| Net investment income (loss) | 0.61(a) | 0.63 | 0.89 | 1.35 | 1.20 | 0.99(c) |
| Portfolio turnover | 4(n) | 10 | 9 | 7 | 12 | 10 |
| Net assets at end of period (000 omitted) | $894,626 | $1,363,474 | $976,055 | $923,304 | $809,357 | $1,034,078 |
| (a) | Annualized. |
| (c) | Amount reflects a one-time reimbursement of expenses by the custodian (or former custodian) without which net investment income and performance would be lower and expenses would be higher. |
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. See Note 2 in the Notes to Financial Statements for additional information. |
| (g) | The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time. |
| (n) | Not annualized. |
| (r) | Certain expenses have been reduced without which performance would have been lower. |
| (s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
| (t) | Total returns do not include any applicable sales charges. |
| (x) | The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes. |
See Notes to Financial Statements
23
Notes to Financial
Statements
(unaudited)
(1) Business and Organization
MFS Global Equity Fund (the fund) is a diversified series of
MFS Series Trust VI (the trust). The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
The fund is an investment company and accordingly follows the
investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services - Investment Companies.
(2) Significant Accounting Policies
General — The preparation
of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these
financial statements, management has evaluated subsequent events occurring after the date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued.
The fund invests in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s market,
economic, industrial, political, regulatory, geopolitical, environmental, public health, and other conditions.
Balance Sheet Offsetting
— The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement, or
similar agreement, does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the fund and the applicable counterparty. The fund's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to the
fund, have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.
Investment Valuations
— Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price 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. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Open-end investment companies are
generally valued at 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. In determining values, 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
24
Notes to Financial
Statements (unaudited) - continued
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 halt 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 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 effect 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. 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. The following is a summary of the levels used as of April 30,
2022 in valuing the fund's assets and liabilities:
25
Notes to Financial
Statements (unaudited) - continued
| Financial Instruments | Level 1 | Level 2 | Level 3 | Total |
| Equity Securities: | ||||
| United States | $1,573,967,000 | $64,213,368 | $— | $1,638,180,368 |
| France | — | 325,255,425 | — | 325,255,425 |
| Switzerland | 600,769 | 259,040,804 | — | 259,641,573 |
| United Kingdom | — | 217,606,117 | — | 217,606,117 |
| Germany | 30,360,365 | 92,228,602 | — | 122,588,967 |
| Canada | 113,996,148 | — | — | 113,996,148 |
| Netherlands | — | 79,924,107 | — | 79,924,107 |
| Japan | — | 55,937,123 | — | 55,937,123 |
| Sweden | 44,862,831 | — | — | 44,862,831 |
| Other Countries | 36,032,742 | 76,014,065 | — | 112,046,807 |
| Mutual Funds | 13,253,213 | — | — | 13,253,213 |
| Total | $1,813,073,068 | $1,170,219,611 | $— | $2,983,292,679 |
For further information regarding
security characteristics, see the Portfolio of Investments.
Foreign Currency Translation
— Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions or on the reporting date for foreign denominated
receivables and payables. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign
exchange rate movements on receivables, payables, income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not separately disclosed.
Security Loans — Under
its Securities Lending Agency Agreement with the fund, JPMorgan Chase and Co., as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated
at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash
and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the
loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the
event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In
return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such
shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. A portion of the income generated upon investment of the collateral is remitted to the Borrowers,
and
26
Notes to Financial
Statements (unaudited) - continued
the remainder is allocated between the fund and the lending agent. On loans
collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending agent. Income from securities lending is separately reported in the Statement of Operations.
The dividend and interest income earned on the securities loaned is accounted for in the same manner as other dividend and interest income. At April 30, 2022, there were no securities on loan or collateral outstanding.
Indemnifications — Under
the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters
into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet
occurred.
Investment Transactions and Income — Investment transactions are recorded on the trade date. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be
recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend payments received in additional securities are recorded on the ex-dividend date in an amount equal to the value of the
security on such date. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis.
The fund may receive proceeds from litigation settlements. Any
proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund.
Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.
Fees Paid Indirectly —
The fund's custody fee may be reduced by a credit earned under an arrangement that measures the value of U.S. dollars deposited with the custodian by the fund. The amount of the credit, for the six months ended April 30, 2022, is shown as a
reduction of total expenses in the Statement of Operations.
Tax Matters and Distributions
— The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As a result, no provision for federal
income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed the fund’s tax positions taken on federal and state
tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability. Foreign taxes, if any, have been accrued by the fund in the accompanying financial statements in
accordance with the applicable foreign tax law. Foreign income taxes may be withheld by certain countries in which the fund invests. Additionally, capital gains realized by the fund on securities issued in or by certain foreign countries may be
subject to capital gains tax imposed by those countries.
27
Notes to Financial
Statements (unaudited) - continued
Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in
different periods for financial statement and tax purposes will reverse at some time in the future.
Book/tax differences primarily relate to wash sale loss
deferrals and treating a portion of the proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions made during the current
period will be determined at fiscal year end. The tax character of distributions declared to shareholders for the last fiscal year is as follows:
| Year
ended 10/31/21 | |
| Ordinary income (including any short-term capital gains) | $19,000,381 |
| Long-term capital gains | 62,529,558 |
| Total distributions | $81,529,939 |
The federal tax cost and the tax
basis components of distributable earnings were as follows:
| As of 4/30/22 | |
| Cost of investments | $1,702,032,294 |
| Gross appreciation | 1,360,446,882 |
| Gross depreciation | (79,186,497) |
| Net unrealized appreciation (depreciation) | $1,281,260,385 |
| As of 10/31/21 | |
| Undistributed ordinary income | 19,228,189 |
| Undistributed long-term capital gain | 164,943,373 |
| Other temporary differences | 259,028 |
| Net unrealized appreciation (depreciation) | 1,921,996,197 |
The aggregate cost above includes
prior fiscal year end tax adjustments, if applicable.
Multiple Classes of Shares of Beneficial Interest — The fund offers multiple classes of shares, which differ in their respective distribution and service fees. The fund's income, realized and unrealized gain (loss), and common expenses are allocated to
shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class C shares will convert
to
28
Notes to Financial
Statements (unaudited) - continued
Class A shares approximately eight years after purchase. The fund’s
distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||
| Class A | $42,467,364 | $18,069,813 | |
| Class B | 742,277 | 379,523 | |
| Class C | 5,994,793 | 2,775,096 | |
| Class I | 62,197,001 | 26,343,700 | |
| Class R1 | 109,269 | 38,933 | |
| Class R2 | 1,785,957 | 669,457 | |
| Class R3 | 4,368,531 | 1,864,571 | |
| Class R4 | 4,886,283 | 2,144,683 | |
| Class R6 | 62,182,461 | 29,244,163 | |
| Total | $184,733,936 | $81,529,939 |
(3) Transactions with
Affiliates
Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The
management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:
| Up to $1 billion | 0.90% |
| In excess of $1 billion and up to $2 billion | 0.75% |
| In excess of $2 billion and up to $5 billion | 0.65% |
| In excess of $5 billion | 0.60% |
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 of Trustees. Effective March 1, 2022, MFS has also 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 of Trustees, but such agreement will continue at least until February 29, 2024. For the six months ended April 30,
2022, this management fee reduction amounted to $237,320, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective
rate of 0.74% of the fund's average daily net assets.
Distributor — MFS Fund
Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $45,524 for the six months ended April 30, 2022, as its portion of the initial sales charge on sales of Class A shares of the fund.
The Board of Trustees has adopted a distribution plan for
certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.
29
Notes to Financial
Statements (unaudited) - continued
The fund's distribution plan provides that the fund will pay
MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee
paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| Distribution
Fee Rate (d) |
Service
Fee Rate (d) |
Total
Distribution Plan (d) |
Annual
Effective Rate (e) |
Distribution
and Service Fee | |
| Class A | — | 0.25% | 0.25% | 0.25% | $ 1,013,274 |
| Class B | 0.75% | 0.25% | 1.00% | 1.00% | 64,549 |
| Class C | 0.75% | 0.25% | 1.00% | 1.00% | 507,455 |
| Class R1 | 0.75% | 0.25% | 1.00% | 1.00% | 9,475 |
| Class R2 | 0.25% | 0.25% | 0.50% | 0.50% | 83,879 |
| Class R3 | — | 0.25% | 0.25% | 0.25% | 104,594 |
| Total Distribution and Service Fees | $1,783,226 |
| (d) | In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the six months ended April 30, 2022 based on each class's average daily net assets. MFD has voluntarily agreed to rebate a portion of each class's 0.25% service fee attributable to accounts for which there is no financial intermediary specified on the account except for accounts attributable to MFS or its affiliates' seed money. For the six months ended April 30, 2022, this rebate amounted to $335, $16, $3, and $8 for Class A, Class B, Class C, and Class R2, respectively, and is included in the reduction of total expenses in the Statement of Operations. |
Certain Class A shares are subject to a contingent deferred
sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. Class C shares are subject to a CDSC in the event
of a shareholder redemption within 12 months of purchase. All contingent deferred sales charges are paid to MFD and during the six months ended April 30, 2022, were as follows:
| Amount | |
| Class A | $1,133 |
| Class B | 5,427 |
| Class C | 3,624 |
Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of the
fund as determined periodically under the supervision of the fund's Board of Trustees. For the six months ended April 30, 2022, the fee was $126,834, which equated to 0.0075% annually of the fund's average daily net assets. MFSC also receives
reimbursement from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing
30
Notes to Financial
Statements (unaudited) - continued
costs which may be paid to affiliated and unaffiliated service providers.
Class R6 shares do not incur sub-accounting fees. For the six months ended April 30, 2022, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $1,129,050.
Administrator — MFS
provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is
charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective rate of 0.0142% of the fund's average
daily net assets.
Trustees’ and
Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not
pay compensation directly to Trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration from MFS for their services to the fund. Certain officers and Trustees of the fund are officers or
directors of MFS, MFD, and MFSC.
Prior to December
31, 2001, the fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such
that the DB plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB plan resulted in a pension expense of $127 and is included in “Independent Trustees’ compensation” in the
Statement of Operations for the six months ended April 30, 2022. The liability for deferred retirement benefits payable to those former independent Trustees under the DB plan amounted to $3,486 at April 30, 2022, and is included in “Payable
for independent Trustees’ compensation” in the Statement of Assets and Liabilities.
Other — The fund invests
in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. This money market fund does not pay a management fee to MFS but does incur investment and
operating costs.
The fund is permitted to engage
in purchase and sale transactions with funds and accounts for which MFS serves as investment adviser or sub-adviser (“cross-trades”) pursuant to a policy adopted by the Board of Trustees. This policy has been designed to ensure that
cross-trades conducted by the fund comply with Rule 17a-7 under the Investment Company Act of 1940. During the six months ended April 30, 2022, the fund engaged in sale transactions pursuant to this policy, which amounted to $3,837,846. The sales
transactions resulted in net realized gains (losses) of $795,818.
(4) Portfolio Securities
For the six months ended April 30, 2022, purchases and sales of
investments, other than short-term obligations, aggregated $144,485,561 and $534,505,221, respectively.
31
Notes to Financial
Statements (unaudited) - continued
(5) Shares of Beneficial Interest
The fund's Declaration of Trust permits the Trustees to issue
an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Shares sold | |||||
| Class A | 1,008,190 | $55,956,281 | 1,775,292 | $99,973,867 | |
| Class B | 596 | 30,627 | 2,428 | 120,744 | |
| Class C | 80,754 | 3,970,720 | 175,401 | 8,503,213 | |
| Class I | 2,344,454 | 134,289,147 | 4,491,898 | 262,991,444 | |
| Class R1 | 2,694 | 132,367 | 2,992 | 149,109 | |
| Class R2 | 84,692 | 4,512,336 | 200,658 | 10,698,239 | |
| Class R3 | 212,213 | 11,879,695 | 360,080 | 19,887,781 | |
| Class R4 | 111,182 | 6,246,771 | 253,665 | 14,349,731 | |
| Class R6 | 2,516,582 | 141,010,708 | 4,956,206 | 289,184,502 | |
| 6,361,357 | $358,028,652 | 12,218,620 | $705,858,630 | ||
| Shares
issued to shareholders in reinvestment of distributions |
|||||
| Class A | 684,445 | $39,129,688 | 326,776 | $16,721,145 | |
| Class B | 13,838 | 717,887 | 7,844 | 367,633 | |
| Class C | 114,658 | 5,642,323 | 58,709 | 2,617,845 | |
| Class I | 972,259 | 57,246,629 | 462,774 | 24,341,891 | |
| Class R1 | 2,159 | 109,269 | 850 | 38,933 | |
| Class R2 | 31,891 | 1,766,786 | 13,177 | 654,619 | |
| Class R3 | 76,992 | 4,368,531 | 36,697 | 1,864,571 | |
| Class R4 | 83,542 | 4,793,659 | 40,089 | 2,057,798 | |
| Class R6 | 1,012,072 | 59,611,019 | 533,533 | 28,069,162 | |
| 2,991,856 | $173,385,791 | 1,480,449 | $76,733,597 | ||
| Shares reacquired | |||||
| Class A | (1,153,369) | $(64,036,672) | (2,733,635) | $(155,336,243) | |
| Class B | (63,941) | (3,234,472) | (120,501) | (6,250,746) | |
| Class C | (360,214) | (17,242,905) | (888,750) | (43,001,502) | |
| Class I | (2,549,479) | (147,273,598) | (4,577,295) | (263,218,385) | |
| Class R1 | (8,200) | (396,553) | (3,798) | (194,160) | |
| Class R2 | (137,179) | (7,404,181) | (222,391) | (12,159,216) | |
| Class R3 | (239,674) | (13,209,761) | (511,349) | (28,176,012) | |
| Class R4 | (134,349) | (7,561,697) | (593,510) | (32,317,749) | |
| Class R6 | (8,071,147) | (466,891,532) | (4,679,404) | (272,732,432) | |
| (12,717,552) | $(727,251,371) | (14,330,633) | $(813,386,445) | ||
32
Notes to Financial
Statements (unaudited) - continued
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Net change | |||||
| Class A | 539,266 | $31,049,297 | (631,567) | $(38,641,231) | |
| Class B | (49,507) | (2,485,958) | (110,229) | (5,762,369) | |
| Class C | (164,802) | (7,629,862) | (654,640) | (31,880,444) | |
| Class I | 767,234 | 44,262,178 | 377,377 | 24,114,950 | |
| Class R1 | (3,347) | (154,917) | 44 | (6,118) | |
| Class R2 | (20,596) | (1,125,059) | (8,556) | (806,358) | |
| Class R3 | 49,531 | 3,038,465 | (114,572) | (6,423,660) | |
| Class R4 | 60,375 | 3,478,733 | (299,756) | (15,910,220) | |
| Class R6 | (4,542,493) | (266,269,805) | 810,335 | 44,521,232 | |
| (3,364,339) | $(195,836,928) | (631,564) | $(30,794,218) | ||
Effective June 1, 2019, purchases of
the fund’s Class B shares are closed to new and existing investors subject to certain exceptions. Please see the fund’s prospectus for details.
(6) Line of Credit
The fund and certain other funds managed by MFS participate in
a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for
temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of Daily Simple SOFR plus 0.10%, the Federal Funds Effective Rate, and the Overnight Bank Funding Rate, plus an agreed
upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds. In addition, the fund and other funds managed by MFS have established unsecured uncommitted
borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the six months ended April 30, 2022, the
fund’s commitment fee and interest expense were $6,625 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.
(7) Investments in 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 following were affiliated issuers:
| Affiliated Issuers | Beginning
Value |
Purchases | Sales
Proceeds |
Realized
Gain (Loss) |
Change
in Unrealized Appreciation or Depreciation |
Ending
Value |
| MFS Institutional Money Market Portfolio | $7,189,905 | $287,499,213 | $281,435,905 | $— | $— | $13,253,213 |
33
Notes to Financial
Statements (unaudited) - continued
| Affiliated Issuers | Dividend
Income |
Capital
Gain Distributions |
| MFS Institutional Money Market Portfolio | $8,238 | $— |
(8) LIBOR Transition
Certain of the fund's investments, including investments in
certain debt instruments and derivatives (if any), as well as borrowings by the fund and certain other contractual arrangements of the fund, may be based on the London Interbank Offered Rate (“LIBOR”). In 2017, the regulatory authority
that oversees financial services firms in the United Kingdom announced plans to transition away from LIBOR by the end of 2021. In March 2021, the administrator of LIBOR announced the extension of the publication of the more commonly used U.S. dollar
LIBOR settings to the end of June 2023. Although the full impacts of the transition away from LIBOR are not fully known, the transition may result in, among other things, an increase in volatility or illiquidity of the markets for instruments that
currently rely on LIBOR to determine interest rates and this could have an adverse impact on the fund's performance. With respect to the fund's accounting for investments, including investments in certain debt instruments and derivatives, as well as
borrowings by the fund and any other contractual arrangements of the fund that undergo reference rate-related modifications as a result of the transition, management will rely upon the relief provided by FASB Codification Topic 848 – Reference
Rate Reform (Topic 848). The guidance in Topic 848 permits the fund to account for those modified contracts as a continuation of the existing contracts. Management is still evaluating the impact to the fund of the June 30, 2023 planned
discontinuation of the more commonly used U.S. dollar LIBOR settings.
(9) Russia and Ukraine Conflict
The market disruptions, which began in late February 2022,
associated with geopolitical events related to the conflict between Russia and Ukraine may adversely affect the value of the fund’s assets and thus the fund’s performance. Management continues to monitor these events and to evaluate the
related impacts, if any, to the fund.
34
Statement Regarding
Liquidity Risk Management Program
The fund has adopted
and implemented a liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The fund’s Board of Trustees (the “Board”) has designated MFS as the
administrator of the Program. The Program is reasonably designed to assess and manage the liquidity risk of the fund. Liquidity risk is the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution
of remaining investors' interests.
MFS provided a written
report to the Board for consideration at its March 2022 meeting that addressed the operation of the Program and provided an assessment of the adequacy and effectiveness of the Program during the period from January 1, 2021 to December 31, 2021 (the
“Covered Period”). The report concluded that during the Covered Period the Program had operated effectively in all material respects and had adequately and effectively been implemented to assess and manage the fund’s liquidity
risk. MFS also reported that there were no liquidity events that impacted the fund or its ability to timely meet redemptions without dilution to existing shareholders during the Covered Period.
There can be no assurance that the Program will achieve its
objectives in the future. Further information on liquidity risk, and other principal risks to which an investment in the fund may be subject, can be found in the prospectus.
35
Proxy
Voting Policies and Information
MFS votes proxies on
behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s
Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to
portfolio securities during the most recent twelve-month period ended June 30 is available by August 31 of each year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure
The fund files a complete schedule of portfolio holdings with
the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. A
shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/openendfunds by choosing the fund's name and then scrolling to the
“Resources” section and clicking on the “Prospectus and Reports” tab.
Further Information
From time to time, MFS may post important information about the
fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at
mfs.com/openendfunds by choosing the fund’s name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.
Information About Fund Contracts and Legal Claims
The fund has entered into contractual arrangements with an
investment adviser, administrator, distributor, shareholder servicing agent, 529 program manager (if applicable), and custodian who each provide services to the fund. Unless expressly stated otherwise, shareholders 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.
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.
Provision of Financial Reports and
Summary Prospectuses
The fund produces financial reports
every six months and updates its summary prospectus and prospectus annually. To avoid sending duplicate copies of materials to households, only one copy of the fund’s annual and semiannual report and summary prospectus may be mailed to
shareholders having the same last name and residential address on the fund’s records. However, any shareholder may contact MFSC (please see back cover for address and telephone number) to request that copies of these reports and summary
prospectuses be sent personally to that shareholder.
36
Semiannual Report
April 30, 2022
MFS® Global Total
Return Fund
Return Fund
MWT-SEM
MFS® Global
Total
Return Fund
Return Fund
CONTENTS
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41 |
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42 |
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72 |
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73 |
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back cover |
The
report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED • MAY LOSE VALUE
• NO BANK GUARANTEE
LETTER FROM THE CHAIR AND
CEO
Dear Shareholders:
Global markets have recently been buffeted by a series of
crosscurrents, including rising inflation, tighter financial conditions, the continued spread of the coronavirus (particularly in Asia), and the evolving geopolitical landscape in the wake of Russia’s invasion of Ukraine. Consequently, at a
time when global growth faces multiple headwinds, central banks have been presented with the challenge of reining in rising prices without tipping economies into recession. The US Federal Reserve has hiked rates at consecutive meetings for the first
time since 2006 and raised rates by more than 0.25% for the first time since 2000. Additional half-point hikes are expected at the Fed’s next two meetings as it seeks to adopt a neutral monetary policy stance before the end of the year. Richly
valued growth equities have been hit particularly hard by higher interest rates, and volatility in credit markets has picked up too.
There are, however, encouraging signs for
the markets. The number of coronavirus cases outside of Asia remains well below prior peaks, and fewer are seriously ill. Meanwhile, unemployment is low and there are signs that some global supply chain bottlenecks are beginning to ease, though
lockdowns in China and disruptions stemming from Russia’s invasion of Ukraine could hamper these advances. Additionally, easier Chinese monetary and regulatory policies and the record pace of corporate stock buybacks are supportive elements,
albeit in an otherwise turbulent investment environment.
It is important to have a deep understanding of company
fundamentals during times of market transition, and we have built our global research platform to do just that.
At MFS®, we put our clients’ assets to work responsibly by carefully navigating increasingly complex global capital markets. Our investment team, guided by a commitment to
long-term fundamental investing, seeks to uncover what we believe are the best, most durable investment ideas in markets around the world. The result — combining collective expertise, long-term discipline, and thoughtful risk management
— is what we consider to be a unique global investment platform that enables us to create value for investors.
Respectfully,
Michael W.
Roberge
Chair and Chief Executive Officer
MFS Investment Management
June 15, 2022
The opinions expressed in this letter are subject to change
and may not be relied upon for investment advice. No forecasts can be guaranteed.
1
Portfolio Composition -
continued
| (a) | For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating agencies above assign a rating, but the security is rated by DBRS Morningstar, then the DBRS Morningstar rating is assigned. If none of the 4 rating agencies listed above rate the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. U.S. Government includes securities issued by the U.S. Department of the Treasury. Federal Agencies includes rated and unrated U.S. Agency fixed-income securities, U.S. Agency mortgage-backed securities, and collateralized mortgage obligations of U.S. Agency mortgage-backed securities. |
Not Rated includes fixed income securities and
fixed income derivatives that have not been rated by any rating agency. Non-Fixed Income includes equity securities (including convertible bonds and equity derivatives) and/or commodity-linked derivatives. The fund may or may not have held all of
these instruments on this date. The fund is not rated by these agencies.
3
Portfolio Composition -
continued
| (g) | The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. (“S&P Global Market Intelligence”). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS. |
| (i) | For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts. |
| (o) | Less than 0.1%. |
| (x) | Represents the portfolio’s exposure to issuer countries as a percentage of a portfolio’s net assets. For purposes of this presentation, United States includes Cash & Cash Equivalents and Other. |
| (y) | Represents the portfolio’s exposure to a particular currency as a percentage of a portfolio's net assets. For purposes of this presentation, United States Dollar includes Cash & Cash Equivalents. |
Where the fund holds convertible bonds, they are treated as
part of the equity portion of the portfolio.
Cash &
Cash Equivalents includes any cash, investments in money market funds, short-term securities, and other assets less liabilities. Please see the Statement of Assets and Liabilities for additional information related to the fund’s cash position
and other assets and liabilities.
Other includes
equivalent exposure from currency derivatives and/or any offsets to derivative positions and may be negative.
Percentages are based on net assets as of April 30, 2022.
The portfolio is actively managed and current holdings may be
different.
4
Expense Table
Fund expenses borne by the shareholders during the period,
November 1, 2021 through April 30, 2022
November 1, 2021 through April 30, 2022
As a
shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and
other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period November 1, 2021 through April 30, 2022.
Actual Expenses
The first line for each share class in the following table
provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000
(for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during
this period.
Hypothetical Example for Comparison
Purposes
The second line for each share class in the
following table provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual
return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5
Expense Table -
continued
| Share
Class |
Annualized
Expense Ratio |
Beginning
Account Value 11/01/21 |
Ending
Account Value 4/30/22 |
Expenses
Paid During Period (p) 11/01/21-4/30/22 | |
| A | Actual | 1.09% | $1,000.00 | $913.88 | $5.17 |
| Hypothetical (h) | 1.09% | $1,000.00 | $1,019.39 | $5.46 | |
| B | Actual | 1.84% | $1,000.00 | $910.63 | $8.72 |
| Hypothetical (h) | 1.84% | $1,000.00 | $1,015.67 | $9.20 | |
| C | Actual | 1.84% | $1,000.00 | $910.20 | $8.71 |
| Hypothetical (h) | 1.84% | $1,000.00 | $1,015.67 | $9.20 | |
| I | Actual | 0.84% | $1,000.00 | $914.59 | $3.99 |
| Hypothetical (h) | 0.84% | $1,000.00 | $1,020.63 | $4.21 | |
| R1 | Actual | 1.84% | $1,000.00 | $910.66 | $8.72 |
| Hypothetical (h) | 1.84% | $1,000.00 | $1,015.67 | $9.20 | |
| R2 | Actual | 1.34% | $1,000.00 | $912.70 | $6.35 |
| Hypothetical (h) | 1.34% | $1,000.00 | $1,018.15 | $6.71 | |
| R3 | Actual | 1.09% | $1,000.00 | $913.66 | $5.17 |
| Hypothetical (h) | 1.09% | $1,000.00 | $1,019.39 | $5.46 | |
| R4 | Actual | 0.84% | $1,000.00 | $914.72 | $3.99 |
| Hypothetical (h) | 0.84% | $1,000.00 | $1,020.63 | $4.21 | |
| R6 | Actual | 0.75% | $1,000.00 | $915.60 | $3.56 |
| Hypothetical (h) | 0.75% | $1,000.00 | $1,021.08 | $3.76 |
| (h) | 5% class return per year before expenses. |
| (p) | “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
6
Portfolio of
Investments
4/30/22 (unaudited)
The Portfolio of Investments is a complete list of all
securities owned by your fund. It is categorized by broad-based asset classes.
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – 59.7% | ||||
| Aerospace & Defense – 1.6% | ||||
| General Dynamics Corp. | 12,060 | $ 2,852,552 | ||
| Honeywell International, Inc. | 51,805 | 10,024,785 | ||
| L3Harris Technologies, Inc. | 22,587 | 5,246,057 | ||
| Lockheed Martin Corp. | 8,080 | 3,491,530 | ||
| Northrop Grumman Corp. | 10,018 | 4,401,909 | ||
| $ 26,016,833 | ||||
| Alcoholic Beverages – 1.1% | ||||
| Diageo PLC | 119,752 | $ 5,934,321 | ||
| Heineken N.V. | 47,729 | 4,655,153 | ||
| Kirin Holdings Co. Ltd. | 128,700 | 1,890,006 | ||
| Pernod Ricard S.A. | 21,343 | 4,397,401 | ||
| $ 16,876,881 | ||||
| Apparel Manufacturers – 0.8% | ||||
| Adidas AG | 16,127 | $ 3,284,719 | ||
| Compagnie Financiere Richemont S.A. | 64,063 | 7,446,871 | ||
| LVMH Moet Hennessy Louis Vuitton SE | 2,928 | 1,873,614 | ||
| $ 12,605,204 | ||||
| Automotive – 1.5% | ||||
| Aptiv PLC (a) | 51,569 | $ 5,486,942 | ||
| Ford Otomotiv Sanayi S.A. | 52,675 | 1,060,365 | ||
| Lear Corp. | 37,164 | 4,754,762 | ||
| LKQ Corp. | 138,914 | 6,894,302 | ||
| Magna International, Inc. | 46,475 | 2,800,836 | ||
| Toyota Motor Corp. | 130,400 | 2,222,011 | ||
| $ 23,219,218 | ||||
| Biotechnology – 0.2% | ||||
| Biogen, Inc. (a) | 5,179 | $ 1,074,332 | ||
| Gilead Sciences, Inc. | 49,097 | 2,913,416 | ||
| $ 3,987,748 | ||||
| Brokerage & Asset Managers – 1.2% | ||||
| Cboe Global Markets, Inc. | 42,795 | $ 4,834,979 | ||
| Charles Schwab Corp. | 171,244 | 11,358,615 | ||
| NASDAQ, Inc. | 21,273 | 3,347,732 | ||
| $ 19,541,326 | ||||
7
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Business Services – 2.5% | ||||
| Accenture PLC, “A” | 26,760 | $ 8,037,634 | ||
| Amdocs Ltd. | 58,048 | 4,625,845 | ||
| CGI, Inc. (a) | 81,662 | 6,511,856 | ||
| Equifax, Inc. | 14,964 | 3,045,473 | ||
| Experian PLC | 85,338 | 2,957,943 | ||
| Fidelity National Information Services, Inc. | 50,097 | 4,967,118 | ||
| Fiserv, Inc. (a) | 51,337 | 5,026,919 | ||
| Secom Co. Ltd. | 69,300 | 4,888,849 | ||
| $ 40,061,637 | ||||
| Cable TV – 0.8% | ||||
| Comcast Corp., “A” | 301,068 | $ 11,970,464 | ||
| Chemicals – 0.6% | ||||
| Nutrien Ltd. | 7,410 | $ 728,166 | ||
| PPG Industries, Inc. | 64,545 | 8,261,115 | ||
| $ 8,989,281 | ||||
| Computer Software – 0.7% | ||||
| Microsoft Corp. | 40,389 | $ 11,208,755 | ||
| Computer Software - Systems – 2.1% | ||||
| Amadeus IT Group S.A. (a) | 86,266 | $ 5,378,964 | ||
| Asustek Computer, Inc. | 63,000 | 759,172 | ||
| Fujitsu Ltd. | 41,200 | 5,824,724 | ||
| Hitachi Ltd. | 127,200 | 5,923,243 | ||
| Hon Hai Precision Industry Co. Ltd. | 1,082,000 | 3,701,851 | ||
| Lenovo Group Ltd. | 1,714,000 | 1,662,569 | ||
| Samsung Electronics Co. Ltd. | 182,301 | 9,686,402 | ||
| $ 32,936,925 | ||||
| Construction – 1.3% | ||||
| Masco Corp. | 140,515 | $ 7,403,736 | ||
| Otis Worldwide Corp. | 21,508 | 1,566,643 | ||
| Stanley Black & Decker, Inc. | 49,595 | 5,958,839 | ||
| Vulcan Materials Co. | 31,739 | 5,468,312 | ||
| $ 20,397,530 | ||||
| Consumer Products – 1.9% | ||||
| Colgate-Palmolive Co. | 170,305 | $ 13,122,000 | ||
| Kimberly-Clark Corp. | 64,888 | 9,008,401 | ||
| Reckitt Benckiser Group PLC | 100,541 | 7,843,371 | ||
| $ 29,973,772 | ||||
8
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Electrical Equipment – 1.6% | ||||
| Johnson Controls International PLC | 130,931 | $ 7,838,839 | ||
| Legrand S.A. | 45,946 | 4,055,755 | ||
| Schneider Electric SE | 89,254 | 12,711,915 | ||
| $ 24,606,509 | ||||
| Electronics – 2.9% | ||||
| Intel Corp. | 109,961 | $ 4,793,200 | ||
| Kyocera Corp. | 63,600 | 3,363,412 | ||
| NXP Semiconductors N.V. | 31,837 | 5,440,943 | ||
| Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 121,473 | 11,288,486 | ||
| Texas Instruments, Inc. | 119,698 | 20,378,585 | ||
| $ 45,264,626 | ||||
| Energy - Independent – 1.0% | ||||
| ConocoPhillips | 116,177 | $ 11,097,227 | ||
| Hess Corp. | 50,820 | 5,238,017 | ||
| $ 16,335,244 | ||||
| Energy - Integrated – 0.8% | ||||
| China Petroleum & Chemical Corp. | 13,294,000 | $ 6,547,165 | ||
| Eni S.p.A. | 328,038 | 4,603,034 | ||
| LUKOIL PJSC, ADR (u) | 8,038 | 0 | ||
| Suncor Energy, Inc. | 44,494 | 1,599,450 | ||
| $ 12,749,649 | ||||
| Food & Beverages – 2.7% | ||||
| Archer Daniels Midland Co. | 34,115 | $ 3,055,339 | ||
| Coca-Cola FEMSA S.A.B. de C.V. (l) | 19,123 | 1,044,116 | ||
| Danone S.A. | 109,166 | 6,562,782 | ||
| General Mills, Inc. | 152,604 | 10,793,681 | ||
| J.M. Smucker Co. | 51,500 | 7,051,895 | ||
| JBS S.A. | 153,439 | 1,174,702 | ||
| Nestle S.A. | 99,741 | 12,877,109 | ||
| $ 42,559,624 | ||||
| Food & Drug Stores – 0.7% | ||||
| Albertsons Cos., Inc., “A” | 74,991 | $ 2,345,718 | ||
| Tesco PLC | 2,774,766 | 9,426,334 | ||
| $ 11,772,052 | ||||
| Gaming & Lodging – 0.0% | ||||
| Tabcorp Holdings Ltd. | 187,083 | $ 711,396 | ||
9
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| General Merchandise – 0.2% | ||||
| BIM Birlesik Magazalar A.S. | 429,883 | $ 2,403,449 | ||
| Wal-Mart de Mexico S.A.B. de C.V. | 325,943 | 1,152,576 | ||
| $ 3,556,025 | ||||
| Health Maintenance Organizations – 0.7% | ||||
| Cigna Corp. | 42,409 | $ 10,465,693 | ||
| Insurance – 4.1% | ||||
| Aon PLC | 53,143 | $ 15,304,653 | ||
| China Pacific Insurance Co. Ltd. | 293,800 | 649,028 | ||
| Chubb Ltd. | 58,973 | 12,174,976 | ||
| Equitable Holdings, Inc. | 100,746 | 2,904,507 | ||
| Everest Re Group Ltd. | 6,168 | 1,694,411 | ||
| Hartford Financial Services Group, Inc. | 41,894 | 2,929,647 | ||
| Manulife Financial Corp. | 464,919 | 9,091,009 | ||
| MetLife, Inc. | 46,311 | 3,041,707 | ||
| Samsung Fire & Marine Insurance Co. Ltd. | 20,273 | 3,333,269 | ||
| Travelers Cos., Inc. | 40,436 | 6,916,982 | ||
| Willis Towers Watson PLC | 34,984 | 7,516,662 | ||
| $ 65,556,851 | ||||
| Internet – 0.2% | ||||
| Alphabet, Inc., “A” (a) | 807 | $ 1,841,727 | ||
| Gartner, Inc. (a) | 3,278 | 952,423 | ||
| $ 2,794,150 | ||||
| Leisure & Toys – 0.2% | ||||
| Brunswick Corp. | 16,997 | $ 1,285,143 | ||
| Nintendo Co. Ltd. | 2,400 | 1,106,064 | ||
| Polaris, Inc. | 5,205 | 494,163 | ||
| $ 2,885,370 | ||||
| Machinery & Tools – 2.1% | ||||
| Eaton Corp. PLC | 92,446 | $ 13,406,519 | ||
| GEA Group AG | 21,668 | 851,234 | ||
| Ingersoll Rand, Inc. | 175,198 | 7,701,704 | ||
| Kubota Corp. | 288,600 | 4,915,419 | ||
| PACCAR, Inc. | 25,773 | 2,140,448 | ||
| Regal Rexnord Corp. | 34,161 | 4,346,645 | ||
| $ 33,361,969 | ||||
| Major Banks – 6.1% | ||||
| Bank of America Corp. | 299,821 | $ 10,697,613 | ||
| BNP Paribas | 218,504 | 11,206,241 | ||
| China Construction Bank Corp. | 4,034,000 | 2,866,484 | ||
10
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Major Banks – continued | ||||
| DBS Group Holdings Ltd. | 406,000 | $ 9,833,798 | ||
| Erste Group Bank AG | 47,072 | 1,454,126 | ||
| Goldman Sachs Group, Inc. | 36,200 | 11,058,738 | ||
| JPMorgan Chase & Co. | 106,957 | 12,766,388 | ||
| Mitsubishi UFJ Financial Group, Inc. | 1,150,900 | 6,689,454 | ||
| National Australia Bank Ltd. | 68,075 | 1,549,413 | ||
| NatWest Group PLC | 3,011,738 | 8,097,197 | ||
| UBS AG | 1,171,471 | 19,819,453 | ||
| $ 96,038,905 | ||||
| Medical & Health Technology & Services – 0.7% | ||||
| McKesson Corp. | 26,642 | $ 8,248,630 | ||
| Quest Diagnostics, Inc. | 17,693 | 2,368,031 | ||
| Sonic Healthcare Ltd. | 29,201 | 748,875 | ||
| $ 11,365,536 | ||||
| Medical Equipment – 1.9% | ||||
| Becton, Dickinson and Co. | 27,523 | $ 6,803,410 | ||
| Boston Scientific Corp. (a) | 148,145 | 6,238,386 | ||
| Danaher Corp. | 14,102 | 3,541,435 | ||
| Medtronic PLC | 83,944 | 8,760,396 | ||
| Thermo Fisher Scientific, Inc. | 8,891 | 4,916,012 | ||
| $ 30,259,639 | ||||
| Metals & Mining – 1.6% | ||||
| Fortescue Metals Group Ltd. | 188,361 | $ 2,855,571 | ||
| Glencore PLC | 260,953 | 1,608,554 | ||
| Kumba Iron Ore Ltd. | 18,411 | 612,517 | ||
| Rio Tinto PLC | 218,079 | 15,468,749 | ||
| Vale S.A. | 280,500 | 4,725,542 | ||
| $ 25,270,933 | ||||
| Natural Gas - Distribution – 0.1% | ||||
| UGI Corp. | 42,888 | $ 1,471,058 | ||
| Natural Gas - Pipeline – 0.2% | ||||
| Equitrans Midstream Corp. | 156,046 | $ 1,226,521 | ||
| Pembina Pipeline Corp. | 48,560 | 1,837,467 | ||
| $ 3,063,988 | ||||
| Other Banks & Diversified Financials – 1.0% | ||||
| Hana Financial Group, Inc. | 25,746 | $ 958,986 | ||
| KBC Group N.V. | 24,348 | 1,658,371 | ||
| Sberbank of Russia PJSC, ADR (u) | 195,129 | 0 | ||
| SLM Corp. | 143,518 | 2,401,056 | ||
11
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Other Banks & Diversified Financials – continued | ||||
| Tisco Financial Group PCL | 438,000 | $ 1,160,540 | ||
| Truist Financial Corp. | 187,341 | 9,057,938 | ||
| $ 15,236,891 | ||||
| Pharmaceuticals – 6.3% | ||||
| Bayer AG | 154,155 | $ 10,160,772 | ||
| Johnson & Johnson | 178,508 | 32,213,554 | ||
| Merck & Co., Inc. | 245,621 | 21,784,127 | ||
| Novo Nordisk A.S., “B” | 24,616 | 2,815,380 | ||
| Organon & Co. | 136,226 | 4,404,187 | ||
| Pfizer, Inc. | 38,435 | 1,886,005 | ||
| Roche Holding AG | 73,730 | 27,307,133 | ||
| $ 100,571,158 | ||||
| Printing & Publishing – 0.8% | ||||
| RELX PLC | 115,931 | $ 3,456,264 | ||
| Wolters Kluwer N.V. | 91,478 | 9,253,020 | ||
| $ 12,709,284 | ||||
| Railroad & Shipping – 0.9% | ||||
| A.P. Moller-Maersk A/S | 198 | $ 568,132 | ||
| Canadian Pacific Railway Ltd. | 92,298 | 6,751,445 | ||
| Nippon Yusen Kabushiki Kaisha | 10,500 | 753,439 | ||
| Union Pacific Corp. | 27,329 | 6,402,911 | ||
| $ 14,475,927 | ||||
| Real Estate – 0.4% | ||||
| Extra Space Storage, Inc., REIT | 14,610 | $ 2,775,900 | ||
| National Retail Properties, Inc., REIT | 35,626 | 1,561,844 | ||
| National Storage Affiliates Trust, REIT | 12,448 | 704,557 | ||
| Spirit Realty Capital, Inc., REIT | 18,035 | 783,620 | ||
| $ 5,825,921 | ||||
| Restaurants – 0.2% | ||||
| Yum China Holdings, Inc. | 82,134 | $ 3,433,201 | ||
| Specialty Chemicals – 0.5% | ||||
| Akzo Nobel N.V. | 52,317 | $ 4,513,901 | ||
| Axalta Coating Systems Ltd. (a) | 117,028 | 2,969,000 | ||
| $ 7,482,901 | ||||
| Specialty Stores – 0.1% | ||||
| Home Depot, Inc. | 5,484 | $ 1,647,394 | ||
12
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Telecommunications - Wireless – 2.1% | ||||
| KDDI Corp. | 639,800 | $ 21,212,874 | ||
| T-Mobile US, Inc. (a) | 62,254 | 7,665,957 | ||
| Vodafone Group PLC | 2,808,934 | 4,249,678 | ||
| $ 33,128,509 | ||||
| Telephone Services – 0.5% | ||||
| France Telecom | 73,705 | $ 877,839 | ||
| Hellenic Telecommunications Organization S.A. | 149,307 | 2,898,210 | ||
| PT Telekom Indonesia | 4,870,400 | 1,552,131 | ||
| Quebecor, Inc., “B” | 125,681 | 2,957,488 | ||
| $ 8,285,668 | ||||
| Tobacco – 1.2% | ||||
| British American Tobacco PLC | 172,887 | $ 7,287,140 | ||
| Japan Tobacco, Inc. | 158,200 | 2,706,478 | ||
| Philip Morris International, Inc. | 97,158 | 9,715,800 | ||
| $ 19,709,418 | ||||
| Utilities - Electric Power – 1.6% | ||||
| American Electric Power Co., Inc. | 15,525 | $ 1,538,683 | ||
| Duke Energy Corp. | 44,113 | 4,859,488 | ||
| E.ON SE | 649,970 | 6,808,860 | ||
| ENGIE Energía Brasil S.A. | 96,400 | 816,990 | ||
| Exelon Corp. | 82,386 | 3,854,017 | ||
| Iberdrola S.A. | 372,633 | 4,257,601 | ||
| Transmissora Alianca de Energia Eletrica S.A., IEU | 330,550 | 2,940,481 | ||
| $ 25,076,120 | ||||
| Total Common Stocks (Identified Cost, $667,571,708) | $ 945,457,183 | |||
| Bonds – 37.9% | ||||
| Aerospace & Defense – 0.0% | ||||
| Raytheon Technologies Corp., 2.82%, 9/01/2051 | $ | 770,000 | $ 569,801 | |
| Airlines – 0.1% | ||||
| EasyJet FinCo B.V., 1.875%, 3/03/2028 | EUR | 1,160,000 | $ 1,088,994 | |
| Apparel Manufacturers – 0.1% | ||||
| Tapestry, Inc., 3.05%, 3/15/2032 | $ | 1,228,000 | $ 1,044,609 | |
13
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Asset-Backed & Securitized – 3.2% | ||||
| 3650R Commercial Mortgage Trust, 2021-PF1, “XA”, 1.147%, 11/15/2054 (i) | $ | 7,280,685 | $ 483,911 | |
| ACREC 2021-FL1 Ltd., “C”, FLR, 2.704% (LIBOR - 1mo. + 2.15%), 10/16/2036 (n) | 1,125,500 | 1,109,528 | ||
| ACRES 2021-FL2 Issuer Ltd., “AS”, FLR, 2.304% (LIBOR - 1mo. + 1.75%), 1/15/2037 (z) | 808,500 | 797,569 | ||
| ACRES 2021-FL2 Issuer Ltd., “B”, FLR, 2.804% (LIBOR - 1mo. + 2.25%), 1/15/2037 (z) | 1,320,000 | 1,302,429 | ||
| Arbor Multi-Family Mortgage Securities Trust, 2021-MF2, “A5”, 2.513%, 6/15/2054 (n) | 1,275,000 | 1,121,069 | ||
| Arbor Multi-Family Mortgage Securities Trust, 2021-MF3, “A5”, 2.575%, 10/15/2054 (n) | 2,100,000 | 1,849,264 | ||
| Arbor Realty Trust, Inc., CLO, 2019-FL2, “AS”, FLR, 2.073% (LIBOR - 1mo. + 1.45%), 9/15/2034 (n) | 1,000,000 | 991,441 | ||
| Arbor Realty Trust, Inc., CLO, 2021-FL1, “B”, FLR, 2.054% (LIBOR - 1mo. + 1.5%), 12/15/2035 (n) | 423,000 | 418,464 | ||
| Arbor Realty Trust, Inc., CLO, 2021-FL2, “B”, FLR, 2.154% (LIBOR - 1mo. + 1.6%), 5/15/2036 (n) | 289,000 | 282,562 | ||
| Arbor Realty Trust, Inc., CLO, 2021-FL2, “C”, FLR, 2.504% (LIBOR - 1mo. + 1.95%), 5/15/2036 (n) | 857,500 | 833,393 | ||
| Arbor Realty Trust, Inc., CLO, 2022-FL1, “B”, FLR, 2.367% (SOFR - 30 day + 2.1%), 1/15/2037 (n) | 1,712,000 | 1,704,518 | ||
| Arbor Realty Trust, Inc., CLO, 2022-FL1, “C”, FLR, 2.567% (SOFR - 30 day + 2.3%), 1/15/2037 (n) | 1,648,500 | 1,641,334 | ||
| AREIT 2022-CRE6 Trust, “B”, FLR, 2.125% (SOFR - 30 day + 1.85%), 11/17/2024 (n) | 620,000 | 617,265 | ||
| AREIT 2022-CRE6 Trust, “C”, FLR, 2.425% (SOFR - 30 day + 2.15%), 12/17/2024 (n) | 312,000 | 305,851 | ||
| BBCMS Mortgage Trust, 2020-C7, “XA”, 1.625%, 4/15/2053 (i) | 1,439,150 | 124,390 | ||
| BBCMS Mortgage Trust, 2021-C10, “XA”, 1.304%, 7/15/2054 (i) | 5,877,689 | 493,386 | ||
| BBCMS Mortgage Trust, 2021-C9, “XA”, 1.758%, 2/15/2054 (i) | 5,404,600 | 570,540 | ||
| Benchmark 2021-B24 Mortgage Trust, “XA”, 1.271%, 3/15/2054 (i) | 4,614,129 | 332,748 | ||
| Benchmark 2021-B26 Mortgage Trust, “XA”, 0.999%, 6/15/2054 (i) | 10,660,714 | 609,066 | ||
| Benchmark 2021-B27 Mortgage Trust, “XA”, 1.386%, 7/15/2054 (i) | 14,016,012 | 1,161,913 | ||
| Benchmark 2021-B28 Mortgage Trust, “XA”, 1.401%, 8/15/2054 (i) | 13,254,358 | 1,113,532 | ||
14
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Asset-Backed & Securitized – continued | ||||
| BSPRT 2021-FL7 Issuer Ltd., “B”, FLR, 2.604% (LIBOR - 1mo. + 2.05%), 12/15/2038 (n) | $ | 388,000 | $ 381,383 | |
| BSPRT 2021-FL7 Issuer Ltd., “C”, FLR, 2.854% (LIBOR - 1mo. + 2.3%), 12/15/2038 (n) | 352,000 | 348,840 | ||
| Business Jet Securities LLC, 2020-1A, “A”, 2.981%, 11/15/2035 (n) | 390,266 | 372,326 | ||
| Business Jet Securities LLC, 2021-1A, “A”, 2.162%, 4/15/2036 (n) | 391,427 | 359,999 | ||
| BXMT 2021-FL4 Ltd., “AS”, FLR, 1.854% (LIBOR - 1mo. + 1.3%), 5/15/2038 (n) | 1,400,000 | 1,378,443 | ||
| BXMT 2021-FL4 Ltd., “B”, FLR, 2.104% (LIBOR - 1mo. + 1.55%), 5/15/2038 (n) | 1,996,500 | 1,961,804 | ||
| Capital Automotive, 2020-1A, “A4”, REIT, 3.19%, 2/15/2050 (n) | 521,809 | 503,702 | ||
| CarMax Auto Owner Trust, 2022-2, “A4”, 3.62%, 9/15/2027 | 795,000 | 799,240 | ||
| CF Hippolyta Issuer LLC, 2020-1, “A1”, 1.69%, 7/15/2060 (n) | 375,782 | 348,566 | ||
| Commercial Mortgage Pass-Through Certificates, 2021-BN32, “XA”, 0.89%, 4/15/2054 (i) | 6,795,111 | 344,566 | ||
| Commercial Mortgage Pass-Through Certificates, 2021-BN34, “XA”, 1.087%, 6/15/2063 (i) | 6,610,937 | 429,684 | ||
| Commercial Mortgage Pass-Through Certificates, 2021-BN35, “XA”, 1.156%, 6/15/2064 (i) | 6,213,649 | 431,028 | ||
| Commercial Mortgage Pass-Through Certificates, 2022-BNK41, “AS”, 3.916%, 4/15/2032 | 1,304,000 | 1,258,304 | ||
| Credit Acceptance Auto Loan Trust, 2021-3A, “A”, 1%, 5/15/2030 (n) | 1,579,000 | 1,511,387 | ||
| Fortress CBO Investments Ltd., 2022-FL3, “AS”, FLR, 2.539% (SOFR - 30 day + 2.25%), 2/23/2039 (n) | 592,000 | 589,637 | ||
| FS Rialto 2021-FL2 Issuer Ltd., “AS”, FLR, 2.104% (LIBOR - 1mo. + 1.6%), 5/16/2038 (n) | 1,454,000 | 1,423,324 | ||
| Harley-Davidson Motorcycle Trust, 2022-A, “A3”, 3.06%, 2/15/2027 | 1,457,000 | 1,451,340 | ||
| LoanCore 2021-CRE5 Ltd., “AS”, FLR, 2.304% (LIBOR - 1mo. + 1.75%), 7/15/2036 (n) | 1,850,000 | 1,816,149 | ||
| LoanCore 2021-CRE5 Ltd., “B”, FLR, 2.554% (LIBOR - 1mo. + 2%), 7/15/2036 (n) | 782,000 | 762,615 | ||
| MF1 2020-FL3 Ltd., “AS”, FLR, 3.473% (LIBOR - 1mo. + 2.85%), 7/15/2035 (z) | 714,500 | 715,189 | ||
| MF1 2021-FL5 Ltd., “AS”, FLR, 1.823% (LIBOR - 1mo. + 1.2%), 7/15/2036 (n) | 1,360,000 | 1,340,019 | ||
15
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Asset-Backed & Securitized – continued | ||||
| MF1 2021-FL5 Ltd., “B”, FLR, 2.073% (LIBOR - 1mo. + 1.45%), 7/15/2036 (n) | $ | 1,977,500 | $ 1,927,421 | |
| MF1 2021-FL5 Ltd., “C”, FLR, 2.323% (LIBOR - 1mo. + 1.7%), 7/15/2036 (n) | 225,000 | 221,774 | ||
| MF1 2021-FL6 Ltd., “AS”, FLR, 2.004% (LIBOR - 1mo. + 1.45%), 7/16/2036 (n) | 2,200,000 | 2,160,818 | ||
| MF1 2021-FL6 Ltd., “B”, FLR, 2.204% (LIBOR - 1mo. + 1.65%), 7/16/2036 (n) | 2,200,000 | 2,143,362 | ||
| MF1 2022-FL8 Ltd., “B”, FLR, 2.217% (SOFR - 30 day + 1.95%), 2/19/2037 (n) | 604,312 | 602,477 | ||
| Morgan Stanley Capital I Trust, 2021-L5, “XA”, 1.422%, 5/15/2054 (i) | 4,677,916 | 382,108 | ||
| Morgan Stanley Capital I Trust, 2021-L6, “XA”, 1.35%, 6/15/2054 (i) | 9,760,550 | 723,771 | ||
| PFP III 2021-7 Ltd., “AS”, FLR, 1.704% (LIBOR - 1mo. + 1.15%), 4/14/2038 (n) | 1,235,438 | 1,221,758 | ||
| PFP III 2021-7 Ltd., “B”, FLR, 1.954% (LIBOR - 1mo. + 1.4%), 4/14/2038 (n) | 484,976 | 472,001 | ||
| PFP III 2021-8 Ltd., “B”, FLR, 2.054% (LIBOR - 1mo. + 1.5%), 8/09/2037 (n) | 507,000 | 496,914 | ||
| Starwood Commercial Mortgage, 2021-FL2, “A”, FLR, 1.754% (LIBOR - 1mo. + 1.2%), 4/18/2038 (n) | 1,400,000 | 1,389,578 | ||
| Starwood Commercial Mortgage, 2021-FL2, “AS”, FLR, 2.004% (LIBOR - 1mo. + 1.45%), 4/18/2038 (n) | 1,400,000 | 1,382,613 | ||
| TPG Real Estate Finance, 2021-FL4, “A”, FLR, 1.754% (LIBOR - 1mo. + 1.2%), 3/15/2038 (n) | 651,000 | 643,032 | ||
| TPG Real Estate Finance, 2021-FL4, “AS”, FLR, 1.954% (LIBOR - 1mo. + 1.4%), 3/15/2038 (n) | 700,000 | 693,907 | ||
| Wells Fargo Commercial Mortgage Trust, 2021-C60, “XA”, 1.679%, 8/15/2054 (i) | 6,975,844 | 716,500 | ||
| $ 51,569,752 | ||||
| Automotive – 0.3% | ||||
| Daimler Finance North America LLC, 1.45%, 3/02/2026 (n) | $ | 771,000 | $ 704,633 | |
| Daimler Trucks Finance North America LLC, 2.5%, 12/14/2031 (n) | 360,000 | 300,464 | ||
| Hyundai Capital America, 2%, 6/15/2028 (n) | 1,809,000 | 1,557,989 | ||
| Hyundai Capital America, 6.375%, 4/08/2030 (n) | 978,000 | 1,071,651 | ||
| Lear Corp., 3.8%, 9/15/2027 | 78,000 | 75,228 | ||
| Stellantis N.V., 2.75%, 4/01/2032 | EUR | 740,000 | 739,592 | |
| Volkswagen International Finance N.V., 4.375%, 3/28/2071 | 900,000 | 872,312 | ||
| $ 5,321,869 | ||||
16
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Broadcasting – 0.4% | ||||
| Discovery, Inc., 4.125%, 5/15/2029 | $ | 718,000 | $ 685,963 | |
| Magallanes, Inc., 4.279%, 3/15/2032 (n) | 1,343,000 | 1,247,505 | ||
| Prosus N.V., 1.539%, 8/03/2028 | EUR | 500,000 | 446,518 | |
| Prosus N.V., 2.085%, 1/19/2030 | 690,000 | 602,001 | ||
| Prosus N.V., 3.68%, 1/21/2030 (n) | $ | 587,000 | 494,982 | |
| Prosus N.V., 2.031%, 8/03/2032 | EUR | 260,000 | 212,551 | |
| Prosus N.V., 3.832%, 2/08/2051 (n) | $ | 660,000 | 436,639 | |
| Ubisoft Entertainment S.A., 0.878%, 11/24/2027 | EUR | 1,100,000 | 1,055,803 | |
| Walt Disney Co., 3.5%, 5/13/2040 | $ | 658,000 | 579,492 | |
| $ 5,761,454 | ||||
| Brokerage & Asset Managers – 0.1% | ||||
| Intercontinental Exchange, Inc., 3%, 9/15/2060 | $ | 1,090,000 | $ 785,134 | |
| Low Income Investment Fund, 3.386%, 7/01/2026 | 285,000 | 279,464 | ||
| Low Income Investment Fund, 3.711%, 7/01/2029 | 760,000 | 755,539 | ||
| $ 1,820,137 | ||||
| Building – 0.2% | ||||
| Holcim Sterling Finance (Netherlands) B.V., 2.25%, 4/04/2034 | GBP | 850,000 | $ 894,185 | |
| Imerys S.A., 1%, 7/15/2031 | EUR | 900,000 | 779,393 | |
| Vulcan Materials Co., 3.5%, 6/01/2030 | $ | 908,000 | 861,472 | |
| $ 2,535,050 | ||||
| Business Services – 0.3% | ||||
| Equinix, Inc., REIT, 1%, 3/15/2033 | EUR | 1,160,000 | $ 979,576 | |
| Euronet Worldwide, Inc., 1.375%, 5/22/2026 | 1,105,000 | 1,095,236 | ||
| Experian PLC, 1.56%, 5/16/2031 | 160,000 | 158,931 | ||
| Fiserv, Inc., 4.4%, 7/01/2049 | $ | 281,000 | 253,194 | |
| Mastercard, Inc., 3.85%, 3/26/2050 | 542,000 | 511,651 | ||
| Verisk Analytics, Inc., 4%, 6/15/2025 | 747,000 | 751,454 | ||
| Visa, Inc., 1.9%, 4/15/2027 | 600,000 | 557,571 | ||
| $ 4,307,613 | ||||
| Cable TV – 0.1% | ||||
| Charter Communications Operating LLC/Charter Communications Operating Capital Corp., 6.384%, 10/23/2035 | $ | 643,000 | $ 677,422 | |
| Charter Communications Operating LLC/Charter Communications Operating Capital Corp., 4.8%, 3/01/2050 | 733,000 | 600,523 | ||
| Comcast Corp., 3.75%, 4/01/2040 | 368,000 | 330,595 | ||
| $ 1,608,540 | ||||
17
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Chemicals – 0.1% | ||||
| Alpek SAB de C.V., 3.25%, 2/25/2031 (n) | $ | 501,000 | $ 424,597 | |
| LYB International Finance III, LLC, 4.2%, 5/01/2050 | 306,000 | 266,632 | ||
| Sherwin-Williams Co., 3.8%, 8/15/2049 | 305,000 | 260,907 | ||
| $ 952,136 | ||||
| Computer Software – 0.2% | ||||
| Microsoft Corp., 3.125%, 11/03/2025 | $ | 1,316,000 | $ 1,317,475 | |
| Microsoft Corp., 2.921%, 3/17/2052 | 1,212,000 | 982,511 | ||
| Microsoft Corp., 3.041%, 3/17/2062 | 412,000 | 327,309 | ||
| $ 2,627,295 | ||||
| Computer Software - Systems – 0.1% | ||||
| Apple, Inc., 2.9%, 9/12/2027 | $ | 2,007,000 | $ 1,940,232 | |
| Apple, Inc., 4.5%, 2/23/2036 | 204,000 | 216,667 | ||
| $ 2,156,899 | ||||
| Conglomerates – 0.2% | ||||
| Carrier Global Corp., 2.722%, 2/15/2030 | $ | 708,000 | $ 622,984 | |
| Carrier Global Corp., 3.577%, 4/05/2050 | 590,000 | 473,265 | ||
| Highland Holdings S.á r.l., 0.318%, 12/15/2026 | EUR | 296,000 | 288,506 | |
| Westinghouse Air Brake Technologies Corp., 4.95%, 9/15/2028 | $ | 1,314,000 | 1,318,217 | |
| $ 2,702,972 | ||||
| Consumer Products – 0.2% | ||||
| GSK Consumer Healthcare Capital US LLC, 2.125%, 3/29/2034 | EUR | 660,000 | $ 666,032 | |
| JAB Holdings B.V., 2.25%, 12/19/2039 | 1,200,000 | 1,013,724 | ||
| L'Oréal S.A., 0.875%, 6/29/2026 | 700,000 | 728,939 | ||
| Reckitt Benckiser Treasury Services PLC, 3%, 6/26/2027 (n) | $ | 1,016,000 | 976,915 | |
| $ 3,385,610 | ||||
| Consumer Services – 0.1% | ||||
| AA Bond Co. Ltd., 3.25%, 7/31/2028 | GBP | 1,000,000 | $ 1,134,281 | |
| Booking Holdings, Inc., 0.5%, 3/08/2028 | EUR | 920,000 | 891,396 | |
| $ 2,025,677 | ||||
| Electrical Equipment – 0.2% | ||||
| Arrow Electronics, Inc., 3.25%, 9/08/2024 | $ | 647,000 | $ 639,702 | |
| Telefonaktiebolaget LM Ericsson, 1.125%, 2/08/2027 | EUR | 1,160,000 | 1,077,740 | |
| Telefonaktiebolaget LM Ericsson, 1%, 5/26/2029 | 1,160,000 | 997,595 | ||
| $ 2,715,037 | ||||
18
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Electronics – 0.2% | ||||
| Broadcom, Inc., 4.15%, 11/15/2030 | $ | 204,000 | $ 193,269 | |
| Broadcom, Inc., 3.419%, 4/15/2033 (n) | 844,000 | 724,102 | ||
| Broadcom, Inc., 3.137%, 11/15/2035 (n) | 957,000 | 772,990 | ||
| Broadcom, Inc., 3.187%, 11/15/2036 (n) | 26,000 | 20,528 | ||
| Broadcom, Inc., 4.926%, 5/15/2037 (n) | 274,000 | 256,149 | ||
| NXP B.V./NXP Funding LLC/NXP USA, Inc., 3.4%, 5/01/2030 (n) | 1,430,000 | 1,302,838 | ||
| $ 3,269,876 | ||||
| Emerging Market Quasi-Sovereign – 1.0% | ||||
| CEZ A.S. (Czech Republic), 2.462%, 4/06/2027 | EUR | 427,000 | $ 444,137 | |
| China Construction Bank Corp. (Hong Kong Branch), 1.25%, 8/04/2025 | $ | 1,700,000 | 1,596,314 | |
| Emirates Development Bank PJSC, 1.639%, 6/15/2026 | 1,730,000 | 1,595,925 | ||
| Export-Import Bank of India, 3.375%, 8/05/2026 | 1,200,000 | 1,152,276 | ||
| Export-Import Bank of India, 3.875%, 2/01/2028 | 1,000,000 | 961,159 | ||
| First Abu Dhabi Bank PJSC, 0.125%, 2/16/2026 | EUR | 1,200,000 | 1,177,722 | |
| First Abu Dhabi Bank PJSC, 1.625%, 4/07/2027 | 1,470,000 | 1,507,479 | ||
| Huarong Finance 2017 Co. Ltd. (People's Republic of China), 4.95%, 11/07/2047 | $ | 850,000 | 631,125 | |
| MDGH - GMTN B.V. (United Arab Emirates), 2.5%, 11/07/2024 | 763,000 | 747,081 | ||
| MDGH - GMTN B.V. (United Arab Emirates), 1%, 3/10/2034 | EUR | 1,540,000 | 1,453,628 | |
| MDGH - GMTN RSC Ltd. (United Arab Emirates), 2.5%, 6/03/2031 | $ | 1,460,000 | 1,304,875 | |
| Ooredoo International Finance Ltd. (State of Qatar), 2.625%, 4/08/2031 | 820,000 | 736,324 | ||
| PT Pertamina (Persero) (Republic of Indonesia), 3.65%, 7/30/2029 | 1,050,000 | 997,197 | ||
| Qatar Petroleum, 2.25%, 7/12/2031 | 1,171,000 | 1,021,698 | ||
| Qatar Petroleum, 3.125%, 7/12/2041 | 776,000 | 648,146 | ||
| $ 15,975,086 | ||||
| Emerging Market Sovereign – 5.2% | ||||
| Oriental Republic of Uruguay, 4.375%, 1/23/2031 | $ | 2,450,000 | $ 2,511,299 | |
| Oriental Republic of Uruguay, 8.25%, 5/21/2031 | UYU | 104,366,000 | 2,280,051 | |
| People's Republic of China, 3.03%, 3/11/2026 | CNY | 245,680,000 | 37,902,579 | |
| People's Republic of China, 3.13%, 11/21/2029 | 61,750,000 | 9,539,892 | ||
| Republic of Indonesia, 3.55%, 3/31/2032 | $ | 990,000 | 938,890 | |
| Republic of Korea, 1.875%, 6/10/2029 | KRW | 18,791,970,000 | 13,660,325 | |
| Republic of Korea, 1.375%, 6/10/2030 | 11,396,200,000 | 7,856,139 | ||
| Republic of Peru, 1.95%, 11/17/2036 | EUR | 1,377,000 | 1,148,211 | |
| State of Qatar, 4%, 3/14/2029 (n) | $ | 878,000 | 899,955 | |
| State of Qatar, 3.75%, 4/16/2030 | 1,230,000 | 1,243,004 | ||
19
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Emerging Market Sovereign – continued | ||||
| State of Qatar, 4.4%, 4/16/2050 | $ | 299,000 | $ 302,781 | |
| United Arab Emirates International Government, 3.25%, 10/19/2061 | 720,000 | 592,750 | ||
| United Mexican States, 7.5%, 6/03/2027 | MXN | 32,900,000 | 1,511,080 | |
| United Mexican States, 2.659%, 5/24/2031 | $ | 2,213,000 | 1,854,317 | |
| United Mexican States, 3.771%, 5/24/2061 | 1,036,000 | 725,118 | ||
| $ 82,966,391 | ||||
| Energy - Independent – 0.3% | ||||
| Diamondback Energy, Inc., 4.4%, 3/24/2051 | $ | 1,153,000 | $ 1,035,222 | |
| Tengizchevroil Finance Co. International Ltd., 4%, 8/15/2026 (n) | 3,609,000 | 3,267,473 | ||
| $ 4,302,695 | ||||
| Energy - Integrated – 0.3% | ||||
| BP Capital Markets PLC, 3.625%, 6/22/2170 | EUR | 1,170,000 | $ 1,147,847 | |
| Cenovus Energy, Inc., 2.65%, 1/15/2032 | $ | 939,000 | 799,331 | |
| Eni S.p.A., 4.25%, 5/09/2029 (n) | 607,000 | 601,524 | ||
| Galp Energia SGPS S.A., 2%, 1/15/2026 | EUR | 1,300,000 | 1,364,550 | |
| MOL PLC, 1.5%, 10/08/2027 | 640,000 | 605,599 | ||
| $ 4,518,851 | ||||
| Financial Institutions – 0.8% | ||||
| AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.3%, 1/30/2032 | $ | 367,000 | $ 305,355 | |
| AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.85%, 10/29/2041 | 293,000 | 226,444 | ||
| Air Lease Corp., 3.125%, 12/01/2030 | 1,075,000 | 928,445 | ||
| Air Lease Corp., 2.875%, 1/15/2032 | 735,000 | 606,046 | ||
| Avolon Holdings Funding Ltd., 4.25%, 4/15/2026 (n) | 509,000 | 488,077 | ||
| Avolon Holdings Funding Ltd., 4.375%, 5/01/2026 (n) | 537,000 | 517,121 | ||
| Avolon Holdings Funding Ltd., 2.75%, 2/21/2028 (n) | 665,000 | 571,986 | ||
| Credit Logement S.A., 1.081% to 2/15/2029, FLR (EUR ICE Swap Rate - 5yr. + 1.1%) to 2/15/2034 | EUR | 1,100,000 | 1,014,586 | |
| CTP N.V., 0.942%, 1/20/2026 | 850,000 | 812,168 | ||
| CTP N.V., 1.5%, 9/27/2031 | 1,050,000 | 869,749 | ||
| EXOR N.V., 2.25%, 4/29/2030 | 600,000 | 620,908 | ||
| EXOR N.V., 0.875%, 1/19/2031 | 500,000 | 445,041 | ||
| Grand City Properties S.A., 1.5%, 12/09/2069 | 900,000 | 812,971 | ||
| Logicor Financing S.à r.l., 1.625%, 1/17/2030 | 890,000 | 813,027 | ||
| Logicor Financing S.à r.l., 0.875%, 1/14/2031 | 275,000 | 227,314 | ||
| P3 Group S.à r.l., 0.875%, 1/26/2026 | 1,130,000 | 1,102,035 | ||
| SBB Treasury Oyj, 0.75%, 12/14/2028 | 590,000 | 478,094 | ||
| SBB Treasury Oyj, 1.125%, 11/26/2029 | 450,000 | 357,184 | ||
20
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Financial Institutions – continued | ||||
| VGP N.V., 1.5%, 4/08/2029 | EUR | 1,000,000 | $ 866,525 | |
| Vonovia SE, 2.375%, 3/25/2032 | 100,000 | 100,072 | ||
| Vonovia SE, 1.625%, 9/01/2051 | 500,000 | 344,015 | ||
| $ 12,507,163 | ||||
| Food & Beverages – 0.5% | ||||
| Anheuser-Busch InBev Worldwide, Inc., 4.375%, 4/15/2038 | $ | 446,000 | $ 426,018 | |
| Anheuser-Busch InBev Worldwide, Inc., 5.55%, 1/23/2049 | 512,000 | 546,359 | ||
| Bacardi Ltd., 5.15%, 5/15/2038 (n) | 658,000 | 657,192 | ||
| Constellation Brands, Inc., 4.4%, 11/15/2025 | 1,053,000 | 1,071,841 | ||
| Constellation Brands, Inc., 3.15%, 8/01/2029 | 1,006,000 | 923,074 | ||
| Constellation Brands, Inc., 2.25%, 8/01/2031 | 400,000 | 331,657 | ||
| Diageo Capital PLC, 1.875%, 6/08/2034 | EUR | 460,000 | 460,441 | |
| JBS USA Lux S.A./JBS USA Food Co./JBS USA Finance, Inc., 3%, 2/02/2029 (n) | $ | 621,000 | 552,690 | |
| Kraft Heinz Foods Co., 3.875%, 5/15/2027 | 1,121,000 | 1,096,200 | ||
| PT Indofood CBP Sukses Makmur Tbk, 3.398%, 6/09/2031 | 1,680,000 | 1,409,481 | ||
| $ 7,474,953 | ||||
| Gaming & Lodging – 0.2% | ||||
| InterContinental Hotels Group PLC, 3.375%, 10/08/2028 | GBP | 740,000 | $ 902,395 | |
| Marriott International, Inc., 2.85%, 4/15/2031 | $ | 606,000 | 521,177 | |
| VICI Properties LP, REIT, 4.95%, 2/15/2030 | 1,583,000 | 1,571,040 | ||
| $ 2,994,612 | ||||
| Insurance – 0.4% | ||||
| Aflac, Inc., 3.6%, 4/01/2030 | $ | 1,004,000 | $ 977,638 | |
| AIA Group Ltd., 0.88%, 9/09/2033 | EUR | 600,000 | 548,165 | |
| Argentum Netherlands B.V., 5.125%, 6/01/2048 | $ | 660,000 | 661,650 | |
| Aviva PLC, 3.875% to 7/03/2024, FLR (EUR Swap Rate - 5yr. + 3.48%) to 7/03/2044 | EUR | 600,000 | 652,390 | |
| Aviva PLC, 4% to 6/03/2035, FLR (GBP Government Yield - 5yr. + 4.7%) to 6/03/2055 | GBP | 927,000 | 1,066,657 | |
| Corebridge Financial, Inc., 4.35%, 4/05/2042 (n) | $ | 244,000 | 220,654 | |
| Credit Agricole Assurances S.A., 2%, 7/17/2030 | EUR | 300,000 | 278,595 | |
| La Mondiale, 4.375% to 10/24/2029, FLR (EUR Swap Rate - 5yr. + 4.411%) to 4/24/2069 | 1,100,000 | 1,093,227 | ||
| Zurich Finance (Ireland) DAC, 3%, 4/19/2051 | $ | 780,000 | 659,100 | |
| $ 6,158,076 | ||||
| Insurance - Property & Casualty – 0.1% | ||||
| Aon Corp./Aon Global Holdings PLC, 2.6%, 12/02/2031 | $ | 244,000 | $ 211,034 | |
| Berkshire Hathaway, Inc., 0.5%, 1/15/2041 | EUR | 325,000 | 230,551 | |
| Marsh & McLennan Cos., Inc., 2.25%, 11/15/2030 | $ | 1,075,000 | 931,203 | |
21
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Insurance - Property & Casualty – continued | ||||
| QBE Insurance Group Ltd., 2.5% to 9/13/2028, FLR (GBP Government Yield - 5yr. + 2.061%) to 9/13/2038 | GBP | 738,000 | $ 808,489 | |
| QBE Insurance Group Ltd., 6.115% to 5/24/2022, FLR (GBP Swap Rate-5yr. + 5%) to 5/24/2042 | 100,000 | 125,924 | ||
| $ 2,307,201 | ||||
| International Market Quasi-Sovereign – 0.6% | ||||
| Airport Authority Hong Kong, 3.25%, 1/12/2052 (n) | $ | 817,000 | $ 676,394 | |
| Deutsche Bahn Finance GmbH (Federal Republic of Germany), 1.375%, 4/16/2040 | EUR | 195,000 | 177,059 | |
| Deutsche Bahn Finance GmbH (Federal Republic of Germany), 0.625%, 12/08/2050 | 350,000 | 241,366 | ||
| Electricite de France S.A., 2.625% to 6/01/2028, FLR (EUR Swap Rate - 5yr. + 2.86%) to 6/01/2033, FLR (EUR Swap Rate - 5yr. + 3.11%) to 6/01/2048, FLR (EUR Swap Rate - 5yr. + 3.86%) to 12/29/2049 | 800,000 | 711,376 | ||
| Electricite de France S.A., 2.875% to 3/15/2027, FLR (EUR Swap Rate - 5yr. + 3.373%) to 3/15/2031, FLR (EUR Swap Rate - 5yr. + 3.623%) to 3/15/2047, FLR (EUR Swap Rate - 5yr. + 4.373%) to 3/15/2070 | 1,400,000 | 1,308,929 | ||
| Electricite de France S.A., 5.875% to 1/22/2029, FLR (GBP Swap Rate - 15yr. + 3.046%) to 1/22/2049, FLR (GBP Swap Rate - 15yr. + 3.796%) to 12/31/2165 | GBP | 800,000 | 946,765 | |
| ESB Finance DAC, 1%, 7/19/2034 | EUR | 930,000 | 860,444 | |
| Islandsbanki (Republic of Iceland), 0.75%, 3/25/2025 | 790,000 | 797,889 | ||
| Kreditanstalt Fuer Wiederaufbau, 1.125%, 3/31/2037 | 3,006,000 | 2,914,726 | ||
| Landsbankinn Bank (Republic of Iceland), 0.375%, 5/23/2025 | 623,000 | 620,245 | ||
| Ontario Teachers' Cadillac Fairview Properties, 2.5%, 10/15/2031 (n) | $ | 927,000 | 803,695 | |
| RTE Reseau de Transport d'Electricite, 0.75%, 1/12/2034 | EUR | 300,000 | 271,561 | |
| $ 10,330,449 | ||||
| International Market Sovereign – 8.7% | ||||
| Commonwealth of Australia, 3.25%, 6/21/2039 | AUD | 6,293,000 | $ 4,382,309 | |
| Commonwealth of Australia, 1.75%, 6/21/2051 | 3,769,000 | 1,832,017 | ||
| Government of Bermuda, 2.375%, 8/20/2030 (n) | $ | 418,000 | 370,975 | |
| Government of Canada, 4%, 6/01/2041 | CAD | 958,000 | 862,718 | |
| Government of Japan, 1.7%, 3/20/2032 | JPY | 1,884,650,000 | 16,612,513 | |
| Government of Japan, 0.4%, 3/20/2036 | 1,769,950,000 | 13,545,454 | ||
| Government of Japan, 2.3%, 3/20/2040 | 2,029,400,000 | 19,961,227 | ||
| Government of New Zealand, 1.5%, 5/15/2031 | NZD | 11,239,000 | 6,071,953 | |
| Government of New Zealand , 0.25%, 5/15/2028 | 23,784,000 | 12,584,303 | ||
| Kingdom of Belgium, 0%, 10/22/2031 (n) | EUR | 6,996,000 | 6,450,511 | |
22
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| International Market Sovereign – continued | ||||
| Kingdom of Spain, 1.25%, 10/31/2030 (n) | EUR | 12,285,000 | $ 12,474,706 | |
| Kingdom of Spain, 1%, 10/31/2050 | 781,000 | 575,044 | ||
| Republic of Cyprus, 0%, 2/09/2026 | 1,882,000 | 1,875,003 | ||
| Republic of Cyprus, 0.625%, 1/21/2030 | 2,249,000 | 2,091,849 | ||
| Republic of Cyprus, 0.95%, 1/20/2032 | 7,695,000 | 7,039,060 | ||
| Republic of Iceland, 5%, 11/15/2028 | ISK | 525,100,000 | 3,970,004 | |
| Republic of Ireland, 0%, 10/18/2031 | EUR | 3,401,000 | 3,110,007 | |
| Republic of Italy, 0.6%, 8/01/2031 (n) | 6,637,000 | 5,808,263 | ||
| Republic of Italy, 1.65%, 3/01/2032 | 11,094,000 | 10,681,305 | ||
| Republic of Italy, 2.15%, 9/01/2052 (n) | 742,000 | 623,691 | ||
| United Kingdom Treasury, 1.75%, 9/07/2037 | GBP | 5,600,000 | 6,714,562 | |
| United Kingdom Treasury, 1.75%, 1/22/2049 | 706,000 | 831,369 | ||
| $ 138,468,843 | ||||
| Local Authorities – 0.3% | ||||
| City of Oslo, 2.17%, 5/18/2029 | NOK | 15,000,000 | $ 1,480,897 | |
| Government of Ontario, 1.9%, 12/02/2051 | CAD | 3,072,000 | 1,595,556 | |
| Province of Alberta, 4.5%, 12/01/2040 | 710,000 | 601,713 | ||
| Province of British Columbia, 2.95%, 6/18/2050 | 600,000 | 402,198 | ||
| $ 4,080,364 | ||||
| Machinery & Tools – 0.1% | ||||
| CNH Industrial Capital LLC, 1.875%, 1/15/2026 | $ | 1,156,000 | $ 1,074,663 | |
| John Deere Capital Corp., 2.8%, 7/18/2029 | 245,000 | 230,284 | ||
| $ 1,304,947 | ||||
| Major Banks – 2.0% | ||||
| Australia and New Zealand Banking Group Ltd., 2.57% to 11/25/2030, FLR (CMT - 5yr. + 1.7%) to 11/25/2035 (n) | $ | 1,034,000 | $ 851,106 | |
| Bank of America Corp., 3.366% to 1/23/2025, FLR (LIBOR - 3mo. + 0.81%) to 1/23/2026 | 1,469,000 | 1,436,820 | ||
| Bank of America Corp., 3.419% to 12/20/2027, FLR (LIBOR - 3mo. + 1.04%) to 12/20/2028 | 1,125,000 | 1,064,463 | ||
| Bank of America Corp., 0.694%, 3/22/2031 | EUR | 610,000 | 554,562 | |
| Bank of America Corp., 2.687% to 4/22/2031, FLR (SOFR - 1 day + 1.32%) to 4/22/2032 | $ | 2,876,000 | 2,467,288 | |
| BNP Paribas S.A., 2.1%, 4/07/2032 | EUR | 600,000 | 593,112 | |
| Commonwealth Bank of Australia, 2.688%, 3/11/2031 (n) | $ | 1,471,000 | 1,230,776 | |
| Credit Suisse Group AG, 3.091% to 5/14/2031, FLR (SOFR - 1 day + 1.73%) to 5/14/2032 (n) | 351,000 | 293,544 | ||
| Goldman Sachs Group, Inc., 2.383% to 7/21/2031, FLR (SOFR - 1 day + 1.248%) to 7/21/2032 | 1,092,000 | 902,479 | ||
| Goldman Sachs Group, Inc., 3.436% to 2/24/2042, FLR (SOFR - 1 day + 1.632%) to 2/24/2043 | 362,000 | 299,991 | ||
23
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Major Banks – continued | ||||
| HSBC Holdings PLC, 2.099% to 6/04/2025, FLR (SOFR - 1 day + 1.929%) to 6/04/2026 | $ | 1,029,000 | $ 960,920 | |
| HSBC Holdings PLC, 4.375%, 11/23/2026 | 2,161,000 | 2,138,474 | ||
| JPMorgan Chase & Co., 1.47%, 9/22/2027 | 1,726,000 | 1,532,607 | ||
| JPMorgan Chase & Co., 1.963%, 3/23/2030 | EUR | 866,000 | 886,751 | |
| Mitsubishi UFJ Financial Group, Inc., 1.412%, 7/17/2025 | $ | 2,681,000 | 2,472,266 | |
| Mitsubishi UFJ Financial Group, Inc., 2.494% to 10/13/2031, FLR (CMT - 1yr. + 0.97%) to 10/13/2032 | 484,000 | 406,792 | ||
| Morgan Stanley, 3.125%, 1/23/2023 | 1,757,000 | 1,763,914 | ||
| Morgan Stanley, 1.593% to 5/04/2026, FLR (SOFR - 1 day + 0.879%) to 5/04/2027 | 2,003,000 | 1,801,119 | ||
| Morgan Stanley, 3.622% to 4/01/2030, FLR (SOFR - 1 day + 3.12%) to 4/01/2031 | 522,000 | 488,438 | ||
| NatWest Group PLC, 3.619%, 3/29/2029 | GBP | 400,000 | 496,399 | |
| Standard Chartered PLC, 0.8% to 11/17/2028, FLR (EUR Swap Rate - 1yr. + 0.85%) to 11/17/2029 | EUR | 630,000 | 581,879 | |
| Toronto Dominion Bank, 1.952%, 4/08/2030 | 1,100,000 | 1,116,206 | ||
| UBS Group AG, 2.746% to 2/11/2032, FLR (CMT - 1yr. + 1.1%) to 2/11/2033 (n) | $ | 1,622,000 | 1,361,676 | |
| UBS Group Funding (Switzerland) AG, 2.859%, 8/15/2023 (n) | 600,000 | 598,821 | ||
| Unicaja Banco S.A., 1%, 12/01/2026 | EUR | 900,000 | 883,420 | |
| UniCredit S.p.A., 0.925% to 1/28/2027, FLR (EURIBOR - 3mo. + 0.85%) to 1/18/2028 | 1,430,000 | 1,380,509 | ||
| Wells Fargo & Co., 2.125%, 9/24/2031 | GBP | 1,030,000 | 1,124,993 | |
| Wells Fargo & Co., 3.35% to 3/02/2032, FLR (SOFR - 1 day + 1.5%) to 3/02/2033 | $ | 1,150,000 | 1,044,893 | |
| Wells Fargo & Co., 3.9%, 5/01/2045 | 316,000 | 283,690 | ||
| $ 31,017,908 | ||||
| Medical & Health Technology & Services – 0.4% | ||||
| Alcon, Inc., 3.8%, 9/23/2049 (n) | $ | 231,000 | $ 189,111 | |
| Becton Dickinson Euro Finance S.à r.l., 1.336%, 8/13/2041 | EUR | 340,000 | 266,027 | |
| HCA, Inc., 5.125%, 6/15/2039 | $ | 399,000 | 384,204 | |
| Laboratory Corp. of America Holdings, 3.6%, 2/01/2025 | 1,075,000 | 1,070,011 | ||
| Laboratory Corp. of America Holdings, 4.7%, 2/01/2045 | 567,000 | 542,372 | ||
| Memorial Sloan-Kettering Cancer Center, 2.955%, 1/01/2050 | 670,000 | 528,967 | ||
| New York Society for the Relief of the Ruptured & Crippled, 2.667%, 10/01/2050 | 1,300,000 | 959,447 | ||
| ProMedica Toledo Hospital, “B”, AGM, 6.015%, 11/15/2048 | 590,000 | 704,183 | ||
| Thermo Fisher Scientific Finance I B.V., 1.125%, 10/18/2033 | EUR | 580,000 | 526,548 | |
24
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Medical & Health Technology & Services – continued | ||||
| Thermo Fisher Scientific Finance I B.V., 2%, 10/18/2051 | EUR | 270,000 | $ 224,963 | |
| Thermo Fisher Scientific, Inc., 1.75%, 10/15/2028 | $ | 1,119,000 | 986,112 | |
| $ 6,381,945 | ||||
| Medical Equipment – 0.0% | ||||
| American Medical Systems Europe B.V., 1.875%, 3/08/2034 | EUR | 240,000 | $ 231,692 | |
| Boston Scientific Corp., 0.625%, 12/01/2027 | 300,000 | 291,650 | ||
| $ 523,342 | ||||
| Metals & Mining – 0.2% | ||||
| Anglo American Capital PLC, 5.625%, 4/01/2030 (n) | $ | 1,815,000 | $ 1,902,498 | |
| Glencore Funding LLC, 2.85%, 4/27/2031 (n) | 1,032,000 | 881,596 | ||
| $ 2,784,094 | ||||
| Midstream – 0.4% | ||||
| Enterprise Products Partners LP, 3.125%, 7/31/2029 | $ | 872,000 | $ 808,736 | |
| Galaxy Pipeline Assets Bidco Ltd., 2.16%, 3/31/2034 (n) | 1,052,142 | 925,092 | ||
| Plains All American Pipeline LP/PAA Finance Corp., 3.55%, 12/15/2029 | 1,445,000 | 1,316,324 | ||
| Sabine Pass Liquefaction LLC, 4.2%, 3/15/2028 | 1,216,000 | 1,192,507 | ||
| Sabine Pass Liquefaction LLC, 4.5%, 5/15/2030 | 689,000 | 683,647 | ||
| Targa Resources Corp., 4.2%, 2/01/2033 | 107,000 | 101,411 | ||
| Targa Resources Corp., 4.95%, 4/15/2052 | 649,000 | 592,748 | ||
| $ 5,620,465 | ||||
| Mortgage-Backed – 2.9% | ||||
| Fannie Mae, 4.5%, 3/01/2025 - 2/01/2046 | $ | 3,595,166 | $ 3,722,500 | |
| Fannie Mae, 5.5%, 1/01/2037 | 13,907 | 14,795 | ||
| Fannie Mae, 6%, 9/01/2037 - 6/01/2038 | 141,620 | 154,586 | ||
| Fannie Mae, 5%, 4/01/2040 - 8/01/2040 | 979,164 | 1,032,529 | ||
| Fannie Mae, 4%, 11/01/2040 - 2/01/2041 | 1,079,503 | 1,090,402 | ||
| Fannie Mae, 3.5%, 5/01/2043 - 12/01/2046 | 1,658,702 | 1,627,560 | ||
| Fannie Mae, UMBS, 2%, 3/01/2042 - 5/01/2052 | 3,315,365 | 2,942,680 | ||
| Fannie Mae, UMBS, 2.5%, 4/01/2042 - 5/01/2052 | 2,564,505 | 2,350,496 | ||
| Fannie Mae, UMBS, 3%, 12/01/2051 | 514,700 | 487,565 | ||
| Freddie Mac, 1.481%, 3/25/2027 (i) | 1,523,000 | 90,283 | ||
| Freddie Mac, 3.224%, 3/25/2027 | 4,500,000 | 4,489,702 | ||
| Freddie Mac, 3.194%, 7/25/2027 | 3,914,000 | 3,896,072 | ||
| Freddie Mac, 3.286%, 11/25/2027 | 2,576,000 | 2,574,056 | ||
| Freddie Mac, 1.914%, 4/25/2030 (i) | 3,170,226 | 383,569 | ||
| Freddie Mac, 1.985%, 4/25/2030 (i) | 2,614,093 | 327,665 | ||
| Freddie Mac, 1.766%, 5/25/2030 (i) | 3,298,344 | 373,923 | ||
| Freddie Mac, 1.906%, 5/25/2030 (i) | 7,375,798 | 900,687 | ||
| Freddie Mac, 1.436%, 6/25/2030 (i) | 3,056,884 | 280,249 | ||
25
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Mortgage-Backed – continued | ||||
| Freddie Mac, 1.704%, 8/25/2030 (i) | $ | 2,713,457 | $ 302,380 | |
| Freddie Mac, 1.263%, 9/25/2030 (i) | 1,752,322 | 145,548 | ||
| Freddie Mac, 1.172%, 11/25/2030 (i) | 3,594,105 | 280,630 | ||
| Freddie Mac, 0.422%, 1/25/2031 (i) | 13,683,912 | 315,985 | ||
| Freddie Mac, 0.613%, 3/25/2031 (i) | 16,766,621 | 618,844 | ||
| Freddie Mac, 1.039%, 7/25/2031 (i) | 3,177,082 | 232,132 | ||
| Freddie Mac, 0.955%, 9/25/2031 (i) | 4,021,884 | 269,713 | ||
| Freddie Mac, 0.665%, 12/25/2031 (i) | 3,294,996 | 148,568 | ||
| Freddie Mac, 5.5%, 7/01/2037 | 26,753 | 28,478 | ||
| Freddie Mac, 4.5%, 12/01/2039 - 5/01/2042 | 1,093,175 | 1,141,126 | ||
| Freddie Mac, 5%, 7/01/2041 | 390,708 | 414,257 | ||
| Freddie Mac, 0.632%, 9/25/2049 (i) | 13,281,588 | 536,741 | ||
| Freddie Mac, UMBS, 3.5%, 1/01/2047 | 739,454 | 729,605 | ||
| Freddie Mac, UMBS, 3%, 6/01/2050 | 110,004 | 104,213 | ||
| Freddie Mac, UMBS, 2.5%, 10/01/2051 - 12/01/2051 | 461,928 | 422,471 | ||
| Freddie Mac, UMBS, 2%, 4/01/2052 | 312,883 | 276,449 | ||
| Ginnie Mae, 5%, 5/15/2040 | 144,188 | 153,245 | ||
| Ginnie Mae, 3.5%, 6/20/2043 | 573,271 | 573,250 | ||
| Ginnie Mae, 2.5%, 8/20/2051 - 11/20/2051 | 1,542,793 | 1,435,012 | ||
| Ginnie Mae, 3%, 10/20/2051 - 2/20/2052 | 947,719 | 905,745 | ||
| Ginnie Mae, 2%, 1/20/2052 | 940,093 | 854,480 | ||
| Ginnie Mae, TBA, 3%, 5/15/2052 | 1,150,000 | 1,096,185 | ||
| Ginnie Mae, TBA, 3.5%, 5/15/2052 | 1,575,000 | 1,540,670 | ||
| Ginnie Mae, TBA, 4%, 5/15/2052 | 383,759 | 384,314 | ||
| UMBS, TBA, 2%, 5/25/2037 - 6/25/2052 | 2,900,000 | 2,609,930 | ||
| UMBS, TBA, 2.5%, 5/25/2052 - 6/25/2052 | 2,175,000 | 1,982,081 | ||
| UMBS, TBA, 3%, 5/25/2052 | 1,350,000 | 1,272,904 | ||
| UMBS, TBA, 3.5%, 5/25/2052 | 550,000 | 533,371 | ||
| $ 46,047,646 | ||||
| Municipals – 0.4% | ||||
| Colorado Housing & Finance Authority, Single Family Mortgage Class I, Taxable, “D-1”, GNMA, 5%, 11/01/2047 (w) | $ | 750,000 | $ 776,918 | |
| Massachusetts Educational Financing Authority, Education Loan Subordinate Rev., Taxable, “A”, 2.641%, 7/01/2037 | 1,235,000 | 1,079,943 | ||
| Michigan Finance Authority Hospital Rev. (Trinity Health Credit Group), Taxable, 3.384%, 12/01/2040 | 945,000 | 834,079 | ||
| New Jersey Economic Development Authority State Pension Funding Rev., Taxable, “A”, NPFG, 7.425%, 2/15/2029 | 801,000 | 913,311 | ||
| Oklahoma Development Finance Authority, Health System Rev., Taxable (OU Medicine Project), “C”, AGM, 4.65%, 8/15/2030 | 992,000 | 1,003,487 | ||
26
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Municipals – continued | ||||
| Puerto Rico Electric Power Authority Rev., “PP”, NPFG, 5%, 7/01/2022 | $ | 425,000 | $ 433,815 | |
| State of Florida, Taxable, “A”, 2.154%, 7/01/2030 | 1,258,000 | 1,101,416 | ||
| $ 6,142,969 | ||||
| Natural Gas - Distribution – 0.1% | ||||
| Boston Gas Co., 3.15%, 8/01/2027 (n) | $ | 857,000 | $ 807,495 | |
| Infraestructura Energética Nova S.A.B. de C.V., 4.875%, 1/14/2048 | 710,000 | 595,520 | ||
| National Grid PLC, 1.125%, 1/14/2033 | GBP | 925,000 | 890,373 | |
| $ 2,293,388 | ||||
| Natural Gas - Pipeline – 0.1% | ||||
| APT Pipelines Ltd., 0.75%, 3/15/2029 | EUR | 970,000 | $ 901,074 | |
| APT Pipelines Ltd., 2.5%, 3/15/2036 | GBP | 850,000 | 874,623 | |
| $ 1,775,697 | ||||
| Network & Telecom – 0.2% | ||||
| AT&T, Inc., 3.5%, 9/15/2053 | $ | 655,000 | $ 512,802 | |
| Verizon Communications, Inc., 2.1%, 3/22/2028 | 649,000 | 581,205 | ||
| Verizon Communications, Inc., 2.55%, 3/21/2031 | 1,057,000 | 920,131 | ||
| Verizon Communications, Inc., 3.55%, 3/22/2051 | 584,000 | 479,588 | ||
| $ 2,493,726 | ||||
| Oils – 0.2% | ||||
| Neste Oyj, 0.75%, 3/25/2028 | EUR | 1,300,000 | $ 1,251,508 | |
| Phillips 66, 4.875%, 11/15/2044 | $ | 568,000 | 568,238 | |
| Valero Energy Corp., 2.8%, 12/01/2031 | 1,352,000 | 1,168,748 | ||
| $ 2,988,494 | ||||
| Other Banks & Diversified Financials – 0.6% | ||||
| AIB Group PLC, 2.25%, 4/04/2028 | EUR | 560,000 | $ 575,836 | |
| Bank Hapoalim B.M., 3.255% to 1/21/2027, FLR (CMT - 5yr. + 2.155%) to 1/21/2032 (n) | $ | 702,000 | 631,800 | |
| Banque Federative du Credit Mutuel S.A., 1.125%, 11/19/2031 | EUR | 600,000 | 515,579 | |
| Belfius Bank S.A., 1.25% to 4/06/2029, FLR (EUR Swap Rate - 5yr. + 1.3%) to 4/06/2034 | 700,000 | 632,797 | ||
| Deutsche Bank AG, 1.875% to 2/23/2027, FLR (EURIBOR - 3mo. + 1.38%) to 2/23/2028 | 200,000 | 201,491 | ||
| Deutsche Bank AG, 1.375% to 2/17/2031, FLR (EURIBOR - 3mo. + 1.5%) to 2/17/2032 | 400,000 | 352,854 | ||
| Groupe BPCE S.A., 4.5%, 3/15/2025 (n) | $ | 950,000 | 948,906 | |
| Groupe BPCE S.A., 0.75%, 3/03/2031 | EUR | 900,000 | 797,343 | |
27
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Other Banks & Diversified Financials – continued | ||||
| Groupe des Assurances du Credit Mutuel, 1.85%, 4/21/2042 | EUR | 700,000 | $ 620,313 | |
| Intesa Sanpaolo S.p.A., 2.625%, 3/11/2036 | GBP | 1,240,000 | 1,249,477 | |
| UBS AG, 5.125%, 5/15/2024 | $ | 1,530,000 | 1,555,560 | |
| Virgin Money UK PLC, 5.125% to 12/11/2025, FLR (GBP Government Yield - 5yr. + 5.25%) to 12/11/2030 | GBP | 950,000 | 1,204,425 | |
| $ 9,286,381 | ||||
| Printing & Publishing – 0.0% | ||||
| Informa PLC, 3.125%, 7/05/2026 | GBP | 448,000 | $ 555,464 | |
| Railroad & Shipping – 0.1% | ||||
| Canadian Pacific Railway Co., 2.45%, 12/02/2031 | $ | 386,000 | $ 335,748 | |
| Wabtec Transportation Netherlands B.V., 1.25%, 12/03/2027 | EUR | 1,259,000 | 1,231,105 | |
| $ 1,566,853 | ||||
| Real Estate - Office – 0.1% | ||||
| Corporate Office Property LP, REIT, 2.25%, 3/15/2026 | $ | 675,000 | $ 626,050 | |
| Corporate Office Property LP, REIT, 2%, 1/15/2029 | 425,000 | 354,354 | ||
| Corporate Office Property LP, REIT, 2.75%, 4/15/2031 | 868,000 | 736,436 | ||
| $ 1,716,840 | ||||
| Real Estate - Other – 0.2% | ||||
| EPR Properties, REIT, 3.6%, 11/15/2031 | $ | 725,000 | $ 614,139 | |
| Lexington Realty Trust Co., 2.7%, 9/15/2030 | 881,000 | 757,387 | ||
| SEGRO Capital S.à r.l., 1.875%, 3/23/2030 | EUR | 1,100,000 | 1,105,054 | |
| W.P. Carey, Inc., REIT, 2.4%, 2/01/2031 | $ | 1,296,000 | 1,100,356 | |
| $ 3,576,936 | ||||
| Real Estate - Retail – 0.2% | ||||
| Brixmor Operating Partnership LP, REIT, 4.05%, 7/01/2030 | $ | 1,174,000 | $ 1,108,825 | |
| Hammerson Ireland Finance Designated Activity Co., 1.75%, 6/03/2027 | EUR | 662,000 | 622,522 | |
| Regency Centers Corp., 3.7%, 6/15/2030 | $ | 286,000 | 267,256 | |
| Spirit Realty, LP, REIT, 3.2%, 1/15/2027 | 531,000 | 505,944 | ||
| STORE Capital Corp., REIT, 2.7%, 12/01/2031 | 949,000 | 790,159 | ||
| $ 3,294,706 | ||||
| Restaurants – 0.1% | ||||
| Starbucks Corp., 3%, 2/14/2032 | $ | 1,298,000 | $ 1,147,351 | |
28
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Retailers – 0.1% | ||||
| Best Buy Co., Inc., 1.95%, 10/01/2030 | $ | 1,357,000 | $ 1,125,379 | |
| Home Depot, Inc., 4.875%, 2/15/2044 | 496,000 | 520,855 | ||
| $ 1,646,234 | ||||
| Specialty Chemicals – 0.0% | ||||
| Akzo Nobel N.V., 2%, 3/28/2032 | EUR | 760,000 | $ 765,032 | |
| Specialty Stores – 0.0% | ||||
| DICK'S Sporting Goods, 3.15%, 1/15/2032 | $ | 994,000 | $ 830,003 | |
| Supermarkets – 0.0% | ||||
| Auchan Holding S.A., 3.25%, 7/23/2027 | EUR | 500,000 | $ 504,044 | |
| Supranational – 0.1% | ||||
| Corporacion Andina de Fomento, 1.625%, 9/23/2025 | $ | 1,020,000 | $ 958,556 | |
| International Bank for Reconstruction and Development, 4.25%, 6/24/2025 | AUD | 440,000 | 319,839 | |
| West African Development Bank, 4.7%, 10/22/2031 | $ | 1,033,000 | 1,021,905 | |
| $ 2,300,300 | ||||
| Telecommunications - Wireless – 0.4% | ||||
| American Tower Corp., REIT, 4%, 6/01/2025 | $ | 1,100,000 | $ 1,098,005 | |
| Crown Castle International Corp., REIT, 1.35%, 7/15/2025 | 501,000 | 461,985 | ||
| Crown Castle International Corp., REIT, 4.45%, 2/15/2026 | 1,922,000 | 1,939,689 | ||
| Crown Castle International Corp., REIT, 3.7%, 6/15/2026 | 425,000 | 417,885 | ||
| Rogers Communications, Inc., 3.8%, 3/15/2032 (n) | 765,000 | 704,442 | ||
| T-Mobile USA, Inc., 3.875%, 4/15/2030 | 1,513,000 | 1,431,962 | ||
| $ 6,053,968 | ||||
| Telephone Services – 0.1% | ||||
| TELUS Corp., 2.85%, 11/13/2031 | CAD | 1,775,000 | $ 1,175,633 | |
| Transportation - Services – 0.2% | ||||
| ERAC USA Finance LLC, 7%, 10/15/2037 (n) | $ | 537,000 | $ 652,745 | |
| Holding d'Infrastructures de Transport, 1.475%, 1/18/2031 | EUR | 1,000,000 | 905,725 | |
| Vinci S.A., 3.75%, 4/10/2029 (n) | $ | 1,334,000 | 1,298,472 | |
| $ 2,856,942 | ||||
| U.S. Government Agencies and Equivalents – 0.0% | ||||
| Small Business Administration, 5.31%, 5/01/2027 | $ | 36,266 | $ 36,799 | |
| Small Business Administration, 2.22%, 3/01/2033 | 304,451 | 285,913 | ||
| $ 322,712 | ||||
29
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| U.S. Treasury Obligations – 3.3% | ||||
| U.S. Treasury Bonds, 1.125%, 8/15/2040 | $ | 26,014,000 | $ 18,652,851 | |
| U.S. Treasury Bonds, 2.375%, 11/15/2049 | 12,704,000 | 11,171,580 | ||
| U.S. Treasury Notes, 1.25%, 3/31/2028 | 10,133,200 | 9,189,546 | ||
| U.S. Treasury Notes, 2.375%, 5/15/2029 (f) | 14,356,700 | 13,834,026 | ||
| $ 52,848,003 | ||||
| Utilities - Electric Power – 0.9% | ||||
| American Electric Power Co., Inc., 2.3%, 3/01/2030 | $ | 1,460,000 | $ 1,253,763 | |
| Bruce Power LP, 2.68%, 12/21/2028 | CAD | 1,600,000 | 1,125,935 | |
| Duke Energy Corp., 3.75%, 9/01/2046 | $ | 910,000 | 753,914 | |
| Enel Americas S.A., 4%, 10/25/2026 | 3,133,000 | 3,041,422 | ||
| Enel Finance International N.V., 2.875%, 4/11/2029 | GBP | 540,000 | 655,172 | |
| Enel Finance International N.V., 4.75%, 5/25/2047 (n) | $ | 456,000 | 438,934 | |
| Enel S.p.A., 2.25% to 3/10/2027, FLR (EUR Swap Rate - 5yr. + 2.679%) to 3/10/2032, FLR (EUR Swap Rate - 5yr. + 2.929%) to 3/10/2047, FLR (EUR Swap Rate - 5yr. + 3.679%) to 3/10/2070 | EUR | 875,000 | 853,850 | |
| Enel S.p.A., 1.875%, 3/08/2170 | 1,025,000 | 863,707 | ||
| Evergy, Inc., 2.9%, 9/15/2029 | $ | 1,246,000 | 1,142,270 | |
| Jersey Central Power & Light Co., 2.75%, 3/01/2032 (n) | 758,000 | 665,693 | ||
| NextEra Energy Capital Holdings, Inc., 3.55%, 5/01/2027 | 351,000 | 344,030 | ||
| Southern California Edison Co., 3.65%, 2/01/2050 | 478,000 | 383,351 | ||
| Virginia Electric & Power Co., 3.5%, 3/15/2027 | 1,800,000 | 1,781,208 | ||
| Virginia Electric & Power Co., 2.875%, 7/15/2029 | 454,000 | 420,589 | ||
| $ 13,723,838 | ||||
| Total Bonds (Identified Cost, $673,659,727) | $ 601,093,866 | |||
| Preferred Stocks – 0.7% | ||||
| Computer Software - Systems – 0.2% | ||||
| Samsung Electronics Co. Ltd. | 61,297 | $ 2,862,479 | ||
| Consumer Products – 0.5% | ||||
| Henkel AG & Co. KGaA | 123,148 | $ 7,971,583 | ||
| Total Preferred Stocks (Identified Cost, $10,326,854) | $ 10,834,062 | |||
| Convertible Preferred Stocks – 0.1% | ||||
| Medical Equipment – 0.1% | ||||
| Boston Scientific Corp., 5.5% (Identified Cost, $1,472,916) | 13,573 | $ 1,531,713 | ||
30
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Investment Companies (h) – 1.0% | ||||
| Money Market Funds – 1.0% | ||||
| MFS Institutional Money Market Portfolio, 0.28% (v) (Identified Cost, $15,511,608) | 15,513,159 | $ 15,513,159 | ||
| Collateral for Securities Loaned – 0.0% | ||||
| JPMorgan U.S. Government Money Market Fund, 0.36% (j) (Identified Cost, $537,806) | 537,806 | $ 537,806 | ||
| Other Assets, Less Liabilities – 0.6% | 9,992,719 | |||
| Net Assets – 100.0% | $1,584,960,508 | |||
| (a) | Non-income producing security. |
| (f) | All or a portion of the security has been segregated as collateral for open futures contracts. |
| (h) | An affiliated issuer, which 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. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $15,513,159 and $1,559,454,630, respectively. |
| (i) | Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security. |
| (j) | The rate quoted is the annualized seven-day yield of the fund at period end. |
| (l) | A portion of this security is on loan. See Note 2 for additional information. |
| (n) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $96,988,134, representing 6.1% of net assets. |
| (u) | The security was valued using significant unobservable inputs and is considered level 3 under the fair value hierarchy. For further information about the fund’s level 3 holdings, please see Note 2 in the Notes to Financial Statements. |
| (v) | Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end. |
| (w) | When-issued security. |
| (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: |
31
Portfolio of
Investments (unaudited) – continued
| Restricted Securities | Acquisition
Date |
Cost | Value |
| ACRES 2021-FL2 Issuer Ltd., “AS”, FLR, 2.304% (LIBOR - 1mo. + 1.75%), 1/15/2037 | 12/07/2021 | $808,500 | $797,569 |
| ACRES 2021-FL2 Issuer Ltd., “B”, FLR, 2.804% (LIBOR - 1mo. + 2.25%), 1/15/2037 | 12/07/2021 | 1,320,000 | 1,302,429 |
| MF1 2020-FL3 Ltd., “AS”, FLR, 3.473% (LIBOR - 1mo. + 2.85%), 7/15/2035 | 6/12/2020 | 714,500 | 715,189 |
| Total Restricted Securities | $2,815,187 | ||
| % of Net assets | 0.2% |
| The following abbreviations are used in this report and are defined: | |
| ADR | American Depositary Receipt |
| AGM | Assured Guaranty Municipal |
| CLO | Collateralized Loan Obligation |
| CMT | Constant Maturity Treasury |
| EURIBOR | Euro Interbank Offered Rate |
| FLR | Floating Rate. Interest rate resets periodically based on the parenthetically disclosed reference rate plus a spread (if any). The period-end rate reported may not be the current rate. All reference rates are USD unless otherwise noted. |
| GNMA | Government National Mortgage Assn. |
| ICE | Intercontinental Exchange |
| IEU | International Equity Unit |
| LIBOR | London Interbank Offered Rate |
| NPFG | National Public Finance Guarantee Corp. |
| PCL | Public Company Limited |
| REIT | Real Estate Investment Trust |
| SOFR | Secured Overnight Financing Rate |
| TBA | To Be Announced |
| UMBS | Uniform Mortgage-Backed Security |
| Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below: | |
| AUD | Australian Dollar |
| CAD | Canadian Dollar |
| CHF | Swiss Franc |
| CLP | Chilean Peso |
| CNH | Chinese Yuan Renminbi (Offshore) |
| CNY | China Yuan Renminbi |
| COP | Colombian Peso |
| CZK | Czech Koruna |
| DKK | Danish Krone |
| EUR | Euro |
| GBP | British Pound |
| HUF | Hungarian Forint |
| IDR | Indonesian Rupiah |
| ILS | Israeli Shekel |
| ISK | Iceland Krona |
| JPY | Japanese Yen |
| KRW | South Korean Won |
| MXN | Mexican Peso |
32
Portfolio of
Investments (unaudited) – continued
| NOK | Norwegian Krone |
| NZD | New Zealand Dollar |
| PLN | Polish Zloty |
| SEK | Swedish Krona |
| SGD | Singapore Dollar |
| THB | Thai Baht |
| TWD | Taiwan Dollar |
| UYU | Uruguayan Peso |
Derivative Contracts at
4/30/22
| Forward Foreign Currency Exchange Contracts | ||||||
| Currency
Purchased |
Currency
Sold |
Counterparty | Settlement
Date |
Unrealized
Appreciation (Depreciation) | ||
| Asset Derivatives | ||||||
| EUR | 1,701,566 | USD | 1,795,163 | HSBC Bank | 7/15/2022 | $6,809 |
| EUR | 922,000 | USD | 972,365 | JPMorgan Chase Bank N.A. | 7/15/2022 | 4,040 |
| EUR | 12,591,477 | USD | 13,280,684 | Morgan Stanley Capital Services, Inc. | 7/15/2022 | 53,790 |
| GBP | 630,000 | USD | 785,301 | JPMorgan Chase Bank N.A. | 7/15/2022 | 7,117 |
| USD | 3,046,480 | AUD | 4,179,000 | Citibank N.A. | 7/15/2022 | 89,897 |
| USD | 1,242,600 | AUD | 1,714,000 | Deutsche Bank AG | 7/15/2022 | 29,969 |
| USD | 10,039,838 | AUD | 13,646,000 | JPMorgan Chase Bank N.A. | 7/15/2022 | 385,489 |
| USD | 723,251 | CAD | 920,000 | Goldman Sachs International | 7/15/2022 | 7,298 |
| USD | 921,721 | CNH | 6,100,000 | Brown Brothers Harriman | 7/15/2022 | 7,671 |
| USD | 647,234 | CNH | 4,153,000 | HSBC Bank | 7/15/2022 | 24,931 |
| USD | 6,744,637 | EUR | 6,121,038 | BNP Paribas S.A. | 7/15/2022 | 262,409 |
| USD | 4,644,352 | EUR | 4,248,105 | Deutsche Bank AG | 7/15/2022 | 145,576 |
| USD | 977,724 | EUR | 882,929 | HSBC Bank | 7/15/2022 | 42,695 |
| USD | 678,128 | EUR | 610,000 | JPMorgan Chase Bank N.A. | 7/15/2022 | 32,133 |
| USD | 4,893,396 | EUR | 4,464,882 | UBS AG | 7/15/2022 | 165,051 |
| USD | 2,696,114 | GBP | 2,100,000 | Barclays Bank PLC | 7/15/2022 | 54,721 |
| USD | 6,539,216 | GBP | 4,993,428 | Deutsche Bank AG | 7/15/2022 | 258,452 |
| USD | 707,577 | GBP | 539,714 | HSBC Bank | 7/15/2022 | 28,722 |
| USD | 383,689 | JPY | 47,341,310 | Deutsche Bank AG | 7/15/2022 | 17,752 |
| USD | 9,504,223 | KRW | 11,650,846,915 | Citibank N.A. | 6/30/2022 | 225,686 |
| USD | 3,446,773 | KRW | 4,202,306,000 | Citibank N.A. | 7/08/2022 | 99,578 |
| USD | 6,734,597 | KRW | 8,208,597,850 | JPMorgan Chase Bank N.A. | 7/08/2022 | 196,334 |
| USD | 2,208,209 | KRW | 2,689,267,000 | Merrill Lynch International | 7/08/2022 | 66,170 |
| USD | 29,603,544 | NZD | 42,686,252 | Deutsche Bank AG | 7/15/2022 | 2,059,775 |
| USD | 3,658,136 | NZD | 5,392,638 | HSBC Bank | 7/15/2022 | 178,477 |
| USD | 849,686 | TWD | 24,516,000 | Barclays Bank PLC | 7/18/2022 | 16,890 |
| USD | 3,516,653 | TWD | 97,348,000 | JPMorgan Chase Bank N.A. | 5/17/2022 | 213,735 |
| USD | 2,627,113 | TWD | 75,984,000 | Merrill Lynch International | 7/18/2022 | 45,974 |
| $4,727,141 | ||||||
| Liability Derivatives | ||||||
| AUD | 22,449,731 | USD | 16,884,330 | Merrill Lynch International | 7/15/2022 | $(1,001,468) |
| CAD | 28,308,573 | USD | 22,588,904 | UBS AG | 7/15/2022 | (558,925) |
| CHF | 3,213,000 | USD | 3,482,040 | UBS AG | 7/15/2022 | (165,227) |
| CLP | 1,301,280,000 | USD | 1,621,735 | Citibank N.A. | 6/29/2022 | (113,523) |
33
Portfolio of
Investments (unaudited) – continued
| Forward Foreign Currency Exchange Contracts - continued | ||||||
| Currency
Purchased |
Currency
Sold |
Counterparty | Settlement
Date |
Unrealized
Appreciation (Depreciation) | ||
| Liability Derivatives - continued | ||||||
| CLP | 283,090,000 | USD | 341,710 | Goldman Sachs International | 6/29/2022 | $(13,603) |
| CNH | 23,693,000 | USD | 3,696,736 | HSBC Bank | 7/15/2022 | (146,474) |
| COP | 2,567,260,000 | USD | 664,578 | Goldman Sachs International | 6/08/2022 | (20,063) |
| CZK | 95,932,000 | USD | 4,293,950 | HSBC Bank | 7/15/2022 | (216,434) |
| DKK | 8,708,598 | USD | 1,257,693 | Brown Brothers Harriman | 7/15/2022 | (17,919) |
| EUR | 5,018,885 | USD | 5,569,558 | HSBC Bank | 7/15/2022 | (254,519) |
| EUR | 994,720 | USD | 1,082,643 | JPMorgan Chase Bank N.A. | 7/15/2022 | (29,227) |
| GBP | 1,075,049 | USD | 1,404,159 | Deutsche Bank AG | 7/15/2022 | (51,955) |
| GBP | 539,347 | USD | 707,035 | HSBC Bank | 7/15/2022 | (28,641) |
| HUF | 162,983,000 | USD | 478,661 | Goldman Sachs International | 7/15/2022 | (28,698) |
| IDR | 41,290,358,660 | USD | 2,869,578 | JPMorgan Chase Bank N.A. | 6/17/2022 | (29,462) |
| ILS | 3,400,000 | USD | 1,035,707 | Brown Brothers Harriman | 7/15/2022 | (13,410) |
| JPY | 263,792,546 | USD | 2,071,367 | HSBC Bank | 7/15/2022 | (32,310) |
| JPY | 61,859,119 | USD | 505,466 | JPMorgan Chase Bank N.A. | 7/15/2022 | (27,309) |
| JPY | 3,210,100,662 | USD | 26,213,891 | Merrill Lynch International | 7/15/2022 | (1,400,532) |
| MXN | 35,968,516 | USD | 1,776,743 | UBS AG | 7/15/2022 | (39,512) |
| NOK | 53,447,246 | USD | 6,168,500 | HSBC Bank | 7/15/2022 | (467,931) |
| NZD | 3,491,000 | USD | 2,311,592 | Deutsche Bank AG | 7/15/2022 | (58,986) |
| NZD | 11,286,000 | USD | 7,605,053 | Goldman Sachs International | 7/15/2022 | (322,639) |
| NZD | 5,423,000 | USD | 3,591,917 | JPMorgan Chase Bank N.A. | 7/15/2022 | (92,667) |
| PLN | 4,899,803 | USD | 1,142,860 | Goldman Sachs International | 7/15/2022 | (48,229) |
| SEK | 29,156,127 | USD | 3,107,524 | Deutsche Bank AG | 7/15/2022 | (131,557) |
| SEK | 30,066,000 | USD | 3,156,171 | Goldman Sachs International | 7/15/2022 | (87,333) |
| SGD | 1,797,000 | USD | 1,327,915 | Citibank N.A. | 7/15/2022 | (28,428) |
| SGD | 9,100,000 | USD | 6,667,896 | JPMorgan Chase Bank N.A. | 7/15/2022 | (87,299) |
| THB | 68,750,000 | USD | 2,044,306 | JPMorgan Chase Bank N.A. | 7/19/2022 | (40,031) |
| USD | 1,906,055 | EUR | 1,800,000 | Deutsche Bank AG | 7/15/2022 | (160) |
| USD | 1,269,904 | GBP | 1,012,000 | JPMorgan Chase Bank N.A. | 7/15/2022 | (2,995) |
| $(5,557,466) | ||||||
| Futures Contracts | ||||||
| Description | Long/
Short |
Currency | Contracts | Notional
Amount |
Expiration
Date |
Value/Unrealized
Appreciation (Depreciation) |
| Asset Derivatives | ||||||
| Interest Rate Futures | ||||||
| Australian Bond 10 yr | Short | AUD | 70 | $6,139,767 | June – 2022 | $79,588 |
| Canadian Treasury Bond 5 yr | Short | CAD | 404 | 36,385,630 | June – 2022 | 1,202,244 |
| Euro-Bund 10 yr | Short | EUR | 163 | 26,410,853 | June – 2022 | 1,751,606 |
| U.S. Treasury Bond | Short | USD | 66 | 9,285,375 | June – 2022 | 711,201 |
| U.S. Treasury Note 5 yr | Short | USD | 562 | 63,321,594 | June – 2022 | 2,626,297 |
| U.S. Treasury Ultra Bond | Short | USD | 3 | 481,312 | June – 2022 | 27,629 |
| U.S. Treasury Ultra Note 10 yr | Short | USD | 236 | 30,444,000 | June – 2022 | 1,654,630 |
| $8,053,195 | ||||||
34
Portfolio of
Investments (unaudited) – continued
| Futures Contracts - continued | ||||||
| Description | Long/
Short |
Currency | Contracts | Notional
Amount |
Expiration
Date |
Value/Unrealized
Appreciation (Depreciation) |
| Liability Derivatives | ||||||
| Interest Rate Futures | ||||||
| Canadian Treasury Bond 10yr | Long | CAD | 29 | $2,852,481 | June – 2022 | $(24,923) |
| Euro-Bobl 5 yr | Long | EUR | 155 | 20,796,124 | June – 2022 | (587,002) |
| Euro-Buxl 30 yr | Long | EUR | 68 | 12,265,524 | June – 2022 | (244,885) |
| Long Gilt 10 yr | Long | GBP | 48 | 7,148,754 | June – 2022 | (145,013) |
| U.S. Treasury Note 10 yr | Long | USD | 94 | 11,200,688 | June – 2022 | (62,225) |
| U.S. Treasury Note 2 yr | Long | USD | 167 | 35,205,687 | June – 2022 | (87,640) |
| $(1,151,688) | ||||||
35
Portfolio of
Investments (unaudited) – continued
| Uncleared Swap Agreements | ||||||||||
| Maturity
Date |
Notional
Amount |
Counterparty | Cash
Flows to Receive/ Frequency |
Cash
Flows to Pay/ Frequency |
Unrealized
Appreciation (Depreciation) |
Net
Unamortized Upfront Payments (Receipts) |
Value | |||
| Asset Derivatives | ||||||||||
| Credit Default Swaps | ||||||||||
| 12/20/26 | EUR | 973,000 | Goldman Sachs International | 5.00%/Quarterly | (1) | $(42,276) | $197,472 | $155,196 | ||
| Liability Derivatives | ||||||||||
| Credit Default Swaps | ||||||||||
| 12/20/31 | EUR | 1,140,000 | Barclays Bank PLC | 1.00%/Quarterly | (2) | $(42,231) | $12,008 | $(30,223) | ||
| (1) | Fund, as protection seller, to pay notional amount upon a defined credit event by Glencore Funding LLC, 1.875%, 9/13/23, a BBB+ rated bond. The fund entered into the contract to gain issuer exposure. |
| (2) | Fund, as protection seller, to pay notional amount upon a defined credit event by Daimler Finance North America LLC, 1.4%, 1/12/24, a A- rated bond. The fund entered into the contract to gain issuer exposure. |
The credit ratings presented here are an indicator of the
current payment/performance risk of the related swap agreement, the reference obligation for which may be either a single security or, in the case of a credit default swap index, a basket of securities issued by corporate or sovereign issuers.
Ratings are assigned to each reference security, including each individual security within a reference basket of securities, utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following
hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating agencies above
assign a rating, but the security is rated by DBRS Morningstar, than the DBRS Morningstar rating is assigned. If none of the 4 rating agencies listed above rate the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the
KBRA rating is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). The ratings for a credit default swap index are calculated by MFS as a weighted average of the external credit ratings of the individual securities that compose
the index’s reference basket of securities.
At
April 30, 2022, the fund had cash collateral of $2,670,000 and other liquid securities with an aggregate value of $2,784,775 to cover any collateral or margin obligations for certain derivative contracts. Restricted cash and/or deposits with brokers
in the Statement of Assets and Liabilities are comprised of cash collateral.
See Notes to Financial Statements
36
Financial Statements
Statement of Assets and Liabilities
At 4/30/22 (unaudited)
This statement represents your fund’s balance sheet,
which details the assets and liabilities comprising the total value of the fund.
| Assets | |
| Investments in unaffiliated issuers, at value, including $522,031 of securities on loan (identified cost, $1,353,569,011) | $1,559,454,630 |
| Investments in affiliated issuers, at value (identified cost, $15,511,608) | 15,513,159 |
| Foreign currency, at value (identified cost, $111,813) | 111,647 |
| Restricted cash for | |
| Forward foreign currency exchange contracts | 2,670,000 |
| Receivables for | |
| Forward foreign currency exchange contracts | 4,727,141 |
| Net daily variation margin on open futures contracts | 167,715 |
| Investments sold | 22,753,302 |
| TBA sale commitments | 3,196,716 |
| Fund shares sold | 1,110,178 |
| Interest and dividends | 8,572,346 |
| Uncleared swaps, at value (net of unamortized premiums paid, $209,480) | 155,196 |
| Receivable from investment adviser | 12,060 |
| Other assets | 45,448 |
| Total assets | $1,618,489,538 |
| Liabilities | |
| Payable to custodian | $18,952 |
| Payables for | |
| Forward foreign currency exchange contracts | 5,557,466 |
| Investments purchased | 11,264,016 |
| TBA purchase commitments | 12,827,486 |
| Fund shares reacquired | 1,849,896 |
| When-issued investments purchased | 779,948 |
| Collateral for securities loaned, at value | 537,806 |
| Uncleared swaps, at value | 30,223 |
| Payable to affiliates | |
| Administrative services fee | 2,279 |
| Shareholder servicing costs | 451,459 |
| Distribution and service fees | 23,950 |
| Payable for independent Trustees' compensation | 5,312 |
| Deferred country tax expense payable | 19,285 |
| Accrued expenses and other liabilities | 160,952 |
| Total liabilities | $33,529,030 |
| Net assets | $1,584,960,508 |
37
Statement of Assets and
Liabilities (unaudited) – continued
| Net assets consist of | |
| Paid-in capital | $1,359,906,738 |
| Total distributable earnings (loss) | 225,053,770 |
| Net assets | $1,584,960,508 |
| Shares of beneficial interest outstanding | 95,438,039 |
| Net assets | Shares
outstanding |
Net
asset value per share (a) | |
| Class A | $709,479,396 | 42,475,832 | $16.70 |
| Class B | 13,254,442 | 774,658 | 17.11 |
| Class C | 89,818,112 | 5,345,843 | 16.80 |
| Class I | 509,812,143 | 30,929,157 | 16.48 |
| Class R1 | 2,315,576 | 138,850 | 16.68 |
| Class R2 | 4,403,522 | 267,043 | 16.49 |
| Class R3 | 16,330,869 | 981,403 | 16.64 |
| Class R4 | 5,917,005 | 353,615 | 16.73 |
| Class R6 | 233,629,443 | 14,171,638 | 16.49 |
| (a) | Maximum offering price per share was equal to the net asset value per share for all share classes, except for Class A, for which the maximum offering price per share was $17.72 [100 / 94.25 x $16.70]. On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares. Redemption price per share was equal to the net asset value per share for Classes I, R1, R2, R3, R4, and R6. |
See Notes to Financial Statements
38
Financial Statements
Statement of Operations
Six months ended 4/30/22 (unaudited)
This statement describes how much your fund earned in
investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.
| Net investment income (loss) | |
| Income | |
| Dividends | $13,580,867 |
| Interest | 6,757,866 |
| Other | 75,134 |
| Dividends from affiliated issuers | 22,016 |
| Income on securities loaned | 6,602 |
| Foreign taxes withheld | (694,149) |
| Total investment income | $19,748,336 |
| Expenses | |
| Management fee | $6,554,451 |
| Distribution and service fees | 1,619,424 |
| Shareholder servicing costs | 819,179 |
| Administrative services fee | 125,777 |
| Independent Trustees' compensation | 13,349 |
| Custodian fee | 144,380 |
| Shareholder communications | 49,405 |
| Audit and tax fees | 44,066 |
| Legal fees | 4,475 |
| Miscellaneous | 110,646 |
| Total expenses | $9,485,152 |
| Fees paid indirectly | (998) |
| Reduction of expenses by investment adviser and distributor | (688,722) |
| Net expenses | $8,795,432 |
| Net investment income (loss) | $10,952,904 |
39
Statement of
Operations (unaudited) – continued
| Realized and unrealized gain (loss) | |
| Realized gain (loss) (identified cost basis) | |
| Unaffiliated issuers (net of $18,919 country tax) | $24,615,142 |
| Affiliated issuers | 167 |
| Written options | 22,174 |
| Futures contracts | 4,390,074 |
| Swap agreements | 37,084 |
| Forward foreign currency exchange contracts | (2,822,290) |
| Foreign currency | (434,139) |
| Net realized gain (loss) | $25,808,212 |
| Change in unrealized appreciation or depreciation | |
| Unaffiliated issuers (net of $7,183 increase in deferred country tax) | $(191,860,588) |
| Affiliated issuers | (166) |
| Futures contracts | 4,747,676 |
| Swap agreements | (84,507) |
| Forward foreign currency exchange contracts | 86,854 |
| Translation of assets and liabilities in foreign currencies | (360,904) |
| Net unrealized gain (loss) | $(187,471,635) |
| Net realized and unrealized gain (loss) | $(161,663,423) |
| Change in net assets from operations | $(150,710,519) |
See Notes to Financial
Statements
40
Financial Statements
Statements of Changes in Net Assets
These statements describe the increases and/or decreases in
net assets resulting from operations, any distributions, and any shareholder transactions.
| Six months ended | Year ended | |
| 4/30/22
(unaudited) |
10/31/21 | |
| Change in net assets | ||
| From operations | ||
| Net investment income (loss) | $10,952,904 | $23,918,866 |
| Net realized gain (loss) | 25,808,212 | 168,413,931 |
| Net unrealized gain (loss) | (187,471,635) | 130,474,754 |
| Change in net assets from operations | $(150,710,519) | $322,807,551 |
| Total distributions to shareholders | $(157,268,520) | $(127,898,152) |
| Change in net assets from fund share transactions | $56,150,987 | $(8,865,770) |
| Total change in net assets | $(251,828,052) | $186,043,629 |
| Net assets | ||
| At beginning of period | 1,836,788,560 | 1,650,744,931 |
| At end of period | $1,584,960,508 | $1,836,788,560 |
See Notes to Financial
Statements
41
Financial
Statements
Financial Highlights
The financial highlights table is intended to help you
understand the fund's financial performance for the semiannual period and the past 5 fiscal years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
| Class A |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.98 | $17.90 | $18.51 | $17.02 | $18.08 | $16.42 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.11 | $0.24 | $0.22 | $0.30 | $0.27 | $0.23(c) |
| Net realized and unrealized gain (loss) | (1.67) | 3.22 | (0.03) | 1.70 | (0.81) | 1.70 |
| Total from investment operations | $(1.56) | $3.46 | $0.19 | $2.00 | $(0.54) | $1.93 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.09) | $(0.35) | $(0.29) | $(0.23) | $(0.28) | $(0.27) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.72) | $(1.38) | $(0.80) | $(0.51) | $(0.52) | $(0.27) |
| Net asset value, end of period (x) | $16.70 | $19.98 | $17.90 | $18.51 | $17.02 | $18.08 |
| Total return (%) (r)(s)(t)(x) | (8.61)(n) | 19.88 | 1.00 | 12.03 | (3.12) | 11.88(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.17(a) | 1.16 | 1.17 | 1.16 | 1.15 | 1.20(c) |
| Expenses after expense reductions (f) | 1.09(a) | 1.09 | 1.09 | 1.09 | 1.09 | 1.08(c) |
| Net investment income (loss) | 1.19(a) | 1.24 | 1.26 | 1.70 | 1.48 | 1.35(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $709,479 | $810,477 | $698,352 | $754,092 | $731,699 | $781,298 |
See Notes to Financial
Statements
42
Financial
Highlights – continued
| Class B |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $20.45 | $18.29 | $18.88 | $17.34 | $18.41 | $16.73 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.04 | $0.10 | $0.09 | $0.17 | $0.13 | $0.11(c) |
| Net realized and unrealized gain (loss) | (1.71) | 3.29 | (0.03) | 1.73 | (0.83) | 1.74 |
| Total from investment operations | $(1.67) | $3.39 | $0.06 | $1.90 | $(0.70) | $1.85 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.04) | $(0.20) | $(0.14) | $(0.08) | $(0.13) | $(0.17) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.67) | $(1.23) | $(0.65) | $(0.36) | $(0.37) | $(0.17) |
| Net asset value, end of period (x) | $17.11 | $20.45 | $18.29 | $18.88 | $17.34 | $18.41 |
| Total return (%) (r)(s)(t)(x) | (8.94)(n) | 18.96 | 0.26 | 11.21 | (3.90) | 11.11(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.92(a) | 1.91 | 1.92 | 1.91 | 1.90 | 1.95(c) |
| Expenses after expense reductions (f) | 1.84(a) | 1.84 | 1.84 | 1.84 | 1.84 | 1.84(c) |
| Net investment income (loss) | 0.41(a) | 0.49 | 0.51 | 0.96 | 0.72 | 0.61(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $13,254 | $17,638 | $19,630 | $28,393 | $36,088 | $48,598 |
See Notes to Financial
Statements
43
Financial
Highlights – continued
| Class C |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $20.12 | $18.01 | $18.60 | $17.10 | $18.15 | $16.51 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.04 | $0.10 | $0.09 | $0.17 | $0.13 | $0.10(c) |
| Net realized and unrealized gain (loss) | (1.69) | 3.24 | (0.03) | 1.70 | (0.80) | 1.71 |
| Total from investment operations | $(1.65) | $3.34 | $0.06 | $1.87 | $(0.67) | $1.81 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.04) | $(0.20) | $(0.14) | $(0.09) | $(0.14) | $(0.17) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.67) | $(1.23) | $(0.65) | $(0.37) | $(0.38) | $(0.17) |
| Net asset value, end of period (x) | $16.80 | $20.12 | $18.01 | $18.60 | $17.10 | $18.15 |
| Total return (%) (r)(s)(t)(x) | (8.98)(n) | 19.00 | 0.28 | 11.14 | (3.81) | 11.03(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.92(a) | 1.91 | 1.92 | 1.91 | 1.90 | 1.95(c) |
| Expenses after expense reductions (f) | 1.84(a) | 1.84 | 1.84 | 1.84 | 1.84 | 1.84(c) |
| Net investment income (loss) | 0.42(a) | 0.49 | 0.52 | 0.96 | 0.72 | 0.60(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $89,818 | $116,520 | $144,961 | $211,090 | $255,464 | $337,099 |
See Notes to Financial
Statements
44
Financial
Highlights – continued
| Class I |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.75 | $17.70 | $18.31 | $16.85 | $17.91 | $16.26 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.13 | $0.29 | $0.27 | $0.34 | $0.31 | $0.28(c) |
| Net realized and unrealized gain (loss) | (1.66) | 3.19 | (0.04) | 1.67 | (0.81) | 1.69 |
| Total from investment operations | $(1.53) | $3.48 | $0.23 | $2.01 | $(0.50) | $1.97 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.11) | $(0.40) | $(0.33) | $(0.27) | $(0.32) | $(0.32) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.74) | $(1.43) | $(0.84) | $(0.55) | $(0.56) | $(0.32) |
| Net asset value, end of period (x) | $16.48 | $19.75 | $17.70 | $18.31 | $16.85 | $17.91 |
| Total return (%) (r)(s)(t)(x) | (8.54)(n) | 20.23 | 1.27 | 12.26 | (2.90) | 12.22(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.92(a) | 0.91 | 0.92 | 0.91 | 0.90 | 0.95(c) |
| Expenses after expense reductions (f) | 0.84(a) | 0.84 | 0.84 | 0.84 | 0.84 | 0.84(c) |
| Net investment income (loss) | 1.43(a) | 1.49 | 1.50 | 1.94 | 1.75 | 1.64(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $509,812 | $597,469 | $524,907 | $569,767 | $667,895 | $585,360 |
See Notes to Financial
Statements
45
Financial
Highlights – continued
| Class R1 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.98 | $17.90 | $18.51 | $17.02 | $18.08 | $16.44 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.04 | $0.10 | $0.09 | $0.17 | $0.12 | $0.10(c) |
| Net realized and unrealized gain (loss) | (1.67) | 3.22 | (0.03) | 1.69 | (0.80) | 1.71 |
| Total from investment operations | $(1.63) | $3.32 | $0.06 | $1.86 | $(0.68) | $1.81 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.04) | $(0.21) | $(0.16) | $(0.09) | $(0.14) | $(0.17) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.67) | $(1.24) | $(0.67) | $(0.37) | $(0.38) | $(0.17) |
| Net asset value, end of period (x) | $16.68 | $19.98 | $17.90 | $18.51 | $17.02 | $18.08 |
| Total return (%) (r)(s)(t)(x) | (8.93)(n) | 18.99 | 0.23 | 11.18 | (3.84) | 11.09(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.92(a) | 1.91 | 1.92 | 1.91 | 1.90 | 1.95(c) |
| Expenses after expense reductions (f) | 1.84(a) | 1.84 | 1.84 | 1.84 | 1.84 | 1.84(c) |
| Net investment income (loss) | 0.45(a) | 0.49 | 0.51 | 0.96 | 0.65 | 0.59(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $2,316 | $2,432 | $2,396 | $2,483 | $2,352 | $2,578 |
See Notes to Financial
Statements
46
Financial
Highlights – continued
| Class R2 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.76 | $17.71 | $18.31 | $16.84 | $17.89 | $16.26 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.09 | $0.19 | $0.18 | $0.25 | $0.22 | $0.19(c) |
| Net realized and unrealized gain (loss) | (1.66) | 3.19 | (0.04) | 1.68 | (0.80) | 1.68 |
| Total from investment operations | $(1.57) | $3.38 | $0.14 | $1.93 | $(0.58) | $1.87 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.07) | $(0.30) | $(0.23) | $(0.18) | $(0.23) | $(0.24) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.70) | $(1.33) | $(0.74) | $(0.46) | $(0.47) | $(0.24) |
| Net asset value, end of period (x) | $16.49 | $19.76 | $17.71 | $18.31 | $16.84 | $17.89 |
| Total return (%) (r)(s)(t)(x) | (8.73)(n) | 19.61 | 0.75 | 11.74 | (3.37) | 11.59(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.42(a) | 1.41 | 1.42 | 1.41 | 1.40 | 1.45(c) |
| Expenses after expense reductions (f) | 1.34(a) | 1.34 | 1.34 | 1.34 | 1.34 | 1.34(c) |
| Net investment income (loss) | 0.95(a) | 0.99 | 1.00 | 1.44 | 1.21 | 1.11(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $4,404 | $5,047 | $4,997 | $11,286 | $13,788 | $21,141 |
See Notes to Financial
Statements
47
Financial
Highlights – continued
| Class R3 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.92 | $17.85 | $18.45 | $16.97 | $18.03 | $16.37 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.11 | $0.24 | $0.22 | $0.30 | $0.26 | $0.23(c) |
| Net realized and unrealized gain (loss) | (1.67) | 3.21 | (0.02) | 1.69 | (0.80) | 1.71 |
| Total from investment operations | $(1.56) | $3.45 | $0.20 | $1.99 | $(0.54) | $1.94 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.09) | $(0.35) | $(0.29) | $(0.23) | $(0.28) | $(0.28) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.72) | $(1.38) | $(0.80) | $(0.51) | $(0.52) | $(0.28) |
| Net asset value, end of period (x) | $16.64 | $19.92 | $17.85 | $18.45 | $16.97 | $18.03 |
| Total return (%) (r)(s)(t)(x) | (8.63)(n) | 19.88 | 1.05 | 12.01 | (3.14) | 11.94(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.17(a) | 1.16 | 1.17 | 1.16 | 1.15 | 1.20(c) |
| Expenses after expense reductions (f) | 1.09(a) | 1.09 | 1.09 | 1.09 | 1.09 | 1.09(c) |
| Net investment income (loss) | 1.17(a) | 1.24 | 1.25 | 1.69 | 1.47 | 1.35(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $16,331 | $19,529 | $19,799 | $20,300 | $18,795 | $21,193 |
See Notes to Financial
Statements
48
Financial
Highlights – continued
| Class R4 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $20.02 | $17.93 | $18.54 | $17.05 | $18.11 | $16.44 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.13 | $0.29 | $0.27 | $0.34 | $0.31 | $0.27(c) |
| Net realized and unrealized gain (loss) | (1.68) | 3.23 | (0.04) | 1.70 | (0.81) | 1.72 |
| Total from investment operations | $(1.55) | $3.52 | $0.23 | $2.04 | $(0.50) | $1.99 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.11) | $(0.40) | $(0.33) | $(0.27) | $(0.32) | $(0.32) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.74) | $(1.43) | $(0.84) | $(0.55) | $(0.56) | $(0.32) |
| Net asset value, end of period (x) | $16.73 | $20.02 | $17.93 | $18.54 | $17.05 | $18.11 |
| Total return (%) (r)(s)(t)(x) | (8.53)(n) | 20.19 | 1.25 | 12.30 | (2.87) | 12.20(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.92(a) | 0.91 | 0.92 | 0.91 | 0.90 | 0.95(c) |
| Expenses after expense reductions (f) | 0.84(a) | 0.84 | 0.84 | 0.84 | 0.84 | 0.84(c) |
| Net investment income (loss) | 1.47(a) | 1.50 | 1.51 | 1.95 | 1.71 | 1.59(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $5,917 | $6,058 | $6,461 | $7,570 | $7,514 | $6,063 |
See Notes to Financial
Statements
49
Financial
Highlights – continued
| Class R6 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $19.75 | $17.71 | $18.32 | $16.85 | $17.91 | $16.26 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.14 | $0.31 | $0.28 | $0.35 | $0.33 | $0.28(c) |
| Net realized and unrealized gain (loss) | (1.65) | 3.18 | (0.03) | 1.69 | (0.81) | 1.70 |
| Total from investment operations | $(1.51) | $3.49 | $0.25 | $2.04 | $(0.48) | $1.98 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.12) | $(0.42) | $(0.35) | $(0.29) | $(0.34) | $(0.33) |
| From net realized gain | (1.63) | (1.03) | (0.51) | (0.28) | (0.24) | — |
| Total distributions declared to shareholders | $(1.75) | $(1.45) | $(0.86) | $(0.57) | $(0.58) | $(0.33) |
| Net asset value, end of period (x) | $16.49 | $19.75 | $17.71 | $18.32 | $16.85 | $17.91 |
| Total return (%) (r)(s)(t)(x) | (8.44)(n) | 20.26 | 1.36 | 12.44 | (2.82) | 12.33(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.83(a) | 0.82 | 0.83 | 0.82 | 0.81 | 0.84(c) |
| Expenses after expense reductions (f) | 0.75(a) | 0.75 | 0.75 | 0.75 | 0.75 | 0.74(c) |
| Net investment income (loss) | 1.53(a) | 1.58 | 1.60 | 2.03 | 1.83 | 1.63(c) |
| Portfolio turnover | 37(n) | 94 | 89 | 65 | 52 | 41 |
| Net assets at end of period (000 omitted) | $233,629 | $261,619 | $229,244 | $230,324 | $363,364 | $347,795 |
| (a) | Annualized. |
| (c) | Amount reflects a one-time reimbursement of expenses by the custodian (or former custodian) without which net investment income and performance would be lower and expenses would be higher. |
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. See Note 2 in the Notes to Financial Statements for additional information. |
| (n) | Not annualized. |
| (r) | Certain expenses have been reduced without which performance would have been lower. |
| (s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
| (t) | Total returns do not include any applicable sales charges. |
| (x) | The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes. |
See Notes to Financial Statements
50
Notes to Financial
Statements
(unaudited)
(1) Business and Organization
MFS Global Total Return Fund (the fund) is a diversified series
of MFS Series Trust VI (the trust). The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
The fund is an investment company and accordingly follows the
investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services - Investment Companies.
(2) Significant Accounting Policies
General — The preparation
of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these
financial statements, management has evaluated subsequent events occurring after the date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued.
The fund invests in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s market,
economic, industrial, political, regulatory, geopolitical, environmental, public health, and other conditions.
Balance Sheet Offsetting
— The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement, or
similar agreement, does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the fund and the applicable counterparty. The fund's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to the
fund, have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.
Investment Valuations
— Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price 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. Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid 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, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing price 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
51
Notes to Financial
Statements (unaudited) - continued
quotation on their primary exchange as provided by a third-party pricing
service. For put options, the position may be valued at the last daily ask quotation if there are no trades reported during the day. Options not traded on an exchange are generally valued at a broker/dealer bid quotation. Foreign currency options
are generally valued at valuations provided by a third-party pricing service. Futures contracts are generally valued at last posted settlement price 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 on their primary exchange as provided by a third-party pricing service. Forward foreign currency exchange contracts are generally 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. Swap agreements are generally valued using valuations provided by a third-party pricing service, which for
cleared swaps includes an evaluation of any trading activity at the clearinghouses. 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. In determining values, 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 halt 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 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 effect 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
52
Notes to Financial
Statements (unaudited) - continued
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. 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, such as futures contracts, forward foreign currency exchange contracts, and swap agreements. The following is a summary of the levels used as of April 30, 2022 in valuing the fund's assets and liabilities:
53
Notes to Financial
Statements (unaudited) - continued
| Financial Instruments | Level 1 | Level 2 | Level 3 | Total |
| Equity Securities: | ||||
| United States | $535,358,990 | $— | $— | $535,358,990 |
| Switzerland | — | 67,450,566 | — | 67,450,566 |
| United Kingdom | 7,287,140 | 59,042,411 | — | 66,329,551 |
| Japan | 10,052,866 | 51,443,107 | — | 61,495,973 |
| France | — | 41,685,547 | — | 41,685,547 |
| Canada | 32,277,717 | — | — | 32,277,717 |
| Germany | 14,780,443 | 14,296,725 | — | 29,077,168 |
| Netherlands | — | 18,422,074 | — | 18,422,074 |
| South Korea | — | 16,841,136 | — | 16,841,136 |
| Other Countries | 32,086,800 | 56,797,436 | 0 | 88,884,236 |
| U.S. Treasury Bonds & U.S. Government Agencies & Equivalents | — | 53,170,715 | — | 53,170,715 |
| Non - U.S. Sovereign Debt | — | 250,041,069 | — | 250,041,069 |
| Municipal Bonds | — | 6,142,969 | — | 6,142,969 |
| U.S. Corporate Bonds | — | 97,267,405 | — | 97,267,405 |
| Residential Mortgage-Backed Securities | — | 46,047,646 | — | 46,047,646 |
| Commercial Mortgage-Backed Securities | — | 23,003,297 | — | 23,003,297 |
| Asset-Backed Securities (including CDOs) | — | 29,700,736 | — | 29,700,736 |
| Foreign Bonds | — | 95,720,029 | — | 95,720,029 |
| Mutual Funds | 16,050,965 | — | — | 16,050,965 |
| Total | $647,894,921 | $927,072,868 | $0 | $1,574,967,789 |
| Other Financial Instruments | ||||
| Futures Contracts – Assets | $8,053,195 | $— | $— | $8,053,195 |
| Futures Contracts – Liabilities | (1,151,688) | — | — | (1,151,688) |
| Forward Foreign Currency Exchange Contracts – Assets | — | 4,727,141 | — | 4,727,141 |
| Forward Foreign Currency Exchange Contracts – Liabilities | — | (5,557,466) | — | (5,557,466) |
| Swap Agreements – Assets | — | 155,196 | — | 155,196 |
| Swap Agreements – Liabilities | — | (30,223) | — | (30,223) |
For further information regarding
security characteristics, see the Portfolio of Investments. At April 30, 2022, the fund held two level 3 securities valued at $0.
Inflation-Adjusted Debt Securities — The fund invests in inflation-adjusted debt securities issued by the U.S. Treasury. The principal value of these debt securities is adjusted through income according to changes in the Consumer Price Index. These
debt securities typically pay a fixed rate of interest, but this fixed rate is applied to the inflation-adjusted principal amount. The principal paid at maturity of the debt security is typically equal to the inflation-adjusted principal amount, or
the security’s original par value, whichever is greater. Other types of inflation-adjusted securities may use other methods to adjust for other measures of inflation.
54
Notes to Financial
Statements (unaudited) - continued
Foreign Currency Translation
— Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions or on the reporting date for foreign denominated
receivables and payables. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign
exchange rate movements on receivables, payables, income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not separately disclosed.
Derivatives — The fund
uses derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease interest rate or currency exposure, or as alternatives to direct investments. Derivatives are used for
hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the fund uses derivatives as an investment to increase market exposure, or for hedging purposes, gains and losses from
derivative instruments may be substantially greater than the derivative’s original cost.
The derivative instruments used by the fund during the period
were written options, purchased options, futures contracts, forward foreign currency exchange contracts, and swap agreements. Depending on the type of derivative, a fund may exit a derivative position by entering into an offsetting transaction with
a counterparty or exchange, negotiating an agreement with the derivative counterparty, or novating the position to a third party. The fund may be unable to promptly close out a futures position in instances where the daily fluctuation in the price
for that type of future exceeds the daily limit set by the exchange. The fund's period end derivatives, as presented in the Portfolio of Investments and the associated Derivative Contract tables, generally are indicative of the volume of its
derivative activity during the period.
The following
table presents, by major type of derivative contract, the fair value, on a gross basis, of the asset and liability components of derivatives held by the fund at April 30, 2022 as reported in the Statement of Assets and Liabilities:
| Fair Value (a) | |||
| Risk | Derivative Contracts | Asset Derivatives | Liability Derivatives |
| Interest Rate | Futures Contracts | $8,053,195 | $(1,151,688) |
| Foreign Exchange | Forward Foreign Currency Exchange Contracts | 4,727,141 | (5,557,466) |
| Credit | Uncleared Swap Agreements | 155,196 | (30,223) |
| Total | $12,935,532 | $(6,739,377) | |
| (a) | Values presented in this table for futures contracts correspond to the values reported in the Portfolio of Investments. Only the current day net variation margin for futures contracts is separately reported within the Statement of Assets and Liabilities. |
55
Notes to Financial
Statements (unaudited) - continued
The following table presents, by major type of derivative
contract, the realized gain (loss) on derivatives held by the fund for the six months ended April 30, 2022 as reported in the Statement of Operations:
| Risk | Futures
Contracts |
Swap
Agreements |
Forward
Foreign Currency Exchange Contracts |
Unaffiliated
Issuers (Purchased Options) |
Written
Options |
| Interest Rate | $4,390,074 | $ — | $ — | $1,791,495 | $ — |
| Foreign Exchange | — | — | (2,822,290) | (157,729) | — |
| Credit | — | 37,084 | — | (17,481) | 22,174 |
| Total | $4,390,074 | $37,084 | $(2,822,290) | $1,616,285 | $22,174 |
The following table presents, by
major type of derivative contract, the change in unrealized appreciation or depreciation on derivatives held by the fund for the six months ended April 30, 2022 as reported in the Statement of Operations:
| Risk | Futures
Contracts |
Swap
Agreements |
Forward
Foreign Currency Exchange Contracts |
Unaffiliated
Issuers (Purchased Options) |
| Interest Rate | $4,747,676 | $ — | $ — | $(322,752) |
| Foreign Exchange | — | — | 86,854 | — |
| Credit | — | (84,507) | — | — |
| Total | $4,747,676 | $(84,507) | $86,854 | $(322,752) |
Derivative counterparty credit risk
is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared derivatives, the fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an
ISDA Master Agreement on a bilateral basis. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a specified deterioration in the credit quality of the other
party. Upon an event of default or a termination of the ISDA Master Agreement, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each agreement to one net amount payable by
one party to the other. This right to close out and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable by the fund under
the applicable transactions, if any.
Collateral and
margin requirements differ by type of derivative. For cleared derivatives (e.g., futures contracts, cleared swaps, and exchange-traded options), margin requirements are set by the clearing broker and the clearing house and collateral, in the form of
cash or securities, is posted by the fund directly with the clearing broker. Collateral terms are counterparty agreement specific for uncleared derivatives (e.g., forward foreign currency exchange contracts, uncleared swap agreements, and uncleared
options) and collateral, in the form of cash and securities, is held in segregated accounts with the fund's custodian in connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a collateral support
annex, the collateral requirements are netted across all transactions traded under such counterparty-specific agreement and an amount is posted from one party to the other to collateralize such obligations. Cash that has been segregated or
56
Notes to Financial
Statements (unaudited) - continued
delivered to cover the fund's collateral or margin obligations under
derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities as restricted cash for uncleared derivatives and/or deposits with brokers for cleared derivatives. Securities pledged as collateral or margin for
the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in “Miscellaneous”
expense in the Statement of Operations.
Written Options — In exchange for a premium, the fund wrote call options on securities for which it anticipated the price would decline and also wrote put options on securities for which it anticipated the price would increase.
At the time the option was written, the fund believed the premium received exceeded the potential loss that could result from adverse price changes in the options’ underlying securities. In a written option, the fund as the option writer
grants the buyer the right to purchase from, or sell to, the fund a specified number of shares or units of a particular security, currency or index at a specified price within a specified period of time.
The premium received is initially recorded as a liability in
the Statement of Assets and Liabilities. The option is subsequently marked-to-market daily with the difference between the premium received and the market value of the written option being recorded as unrealized appreciation or depreciation. When a
written option expires, the fund realizes a gain equal to the amount of the premium received. The difference between the premium received and the amount paid on effecting a closing transaction is considered a realized gain or loss. When a written
call option is exercised, the premium received is offset against the proceeds to determine the realized gain or loss. When a written put option is exercised, the premium reduces the cost basis of the security purchased by the fund.
At the initiation of the written option contract, for exchange
traded options, the fund is required to deposit securities or cash as collateral with the custodian for the benefit of the broker or directly with the clearing broker, based on the type of option. For uncleared options, the fund may post collateral
subject to the terms of an ISDA Master Agreement as generally described above if the market value of the options contract moves against it. The fund, as writer of an option, may have no control over whether the underlying securities may be sold
(call) or purchased (put) and, as a result, bears the market risk of an unfavorable change in the price of the securities underlying the written option. Losses from writing options can exceed the premium received and can exceed the potential loss
from an ordinary buy and sell transaction. Although the fund’s market risk may be significant, the maximum counterparty credit risk to the fund is equal to the market value of any collateral posted to the broker. For uncleared options, this
risk is mitigated in cases where there is an ISDA Master Agreement between the fund and the counterparty providing for netting as described above.
Purchased Options — The
fund purchased call and put options for a premium. Purchased call and put options entitle the holder to buy and sell a specified number of shares or units of a particular security, currency or index at a specified price at a specified date or within
a specified period of time. Purchasing call options may hedge against an anticipated increase in the dollar cost of securities or currency to be acquired or increase the fund’s exposure to an underlying instrument. Purchasing put options may
hedge against an anticipated decline in the value of portfolio securities or currency or decrease the fund's exposure to an underlying instrument.
57
Notes to Financial
Statements (unaudited) - continued
The premium paid is initially recorded as an investment in the
Statement of Assets and Liabilities. That investment is subsequently marked-to-market daily with the difference between the premium paid and the market value of the purchased option being recorded as unrealized appreciation or depreciation. Premiums
paid for purchased call and put options which have expired are treated as realized losses on investments in the Statement of Operations. Upon the exercise or closing of a purchased call option, the premium paid is added to the cost of the security
or financial instrument purchased. Upon the exercise or closing of a purchased put option, the premium paid is offset against the proceeds on the sale of the underlying security or financial instrument in order to determine the realized gain or loss
on investments.
Whether or not the option is exercised,
the fund's maximum risk of loss from purchasing an option is the amount of premium paid. All option contracts involve credit risk if the counterparty to the option contract fails to perform. For uncleared options, this risk is mitigated in cases
where there is an ISDA Master Agreement between the fund and the counterparty providing for netting as described above and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the
counterparty under such ISDA Master Agreement.
Futures
Contracts — The fund entered into futures contracts which may be used to hedge against or obtain broad market exposure, interest rate exposure, currency exposure, or to manage duration. A futures contract
represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.
Upon entering into a futures contract, the fund is required to
deposit with the broker, either in cash or securities, an initial margin in an amount equal to a specified percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by the fund each day, depending
on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gain or loss by the fund until the contract is closed or expires at which point the gain or loss on futures contracts is
realized.
The fund bears the risk of interest rates,
exchange rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures contracts may present less counterparty risk to the fund since
the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The fund’s maximum risk of loss due to counterparty credit
risk is equal to the margin posted by the fund to the broker plus any gains or minus any losses on the outstanding futures contracts.
Forward Foreign Currency Exchange Contracts — The fund entered into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. These contracts may be used to hedge the fund’s
currency risk or for non-hedging purposes. For hedging purposes, the fund may enter into contracts to deliver or receive foreign currency that the fund will receive from or use in its normal investment activities. The fund may also use contracts to
hedge against declines in the value of foreign currency denominated securities due to unfavorable exchange rate movements. For non-hedging purposes, the fund may enter into contracts with the intent of changing the relative exposure of the
fund’s portfolio of securities to different currencies to take advantage of anticipated exchange rate changes.
58
Notes to Financial
Statements (unaudited) - continued
Forward foreign currency exchange contracts are adjusted by the
daily exchange rate of the underlying currency and any unrealized gains or losses are recorded as a receivable or payable for forward foreign currency exchange contracts until the contract settlement date. On contract settlement date, any gain or
loss on the contract is recorded as realized gains or losses on forward foreign currency exchange contracts.
Risks may arise upon entering into these contracts from
unanticipated movements in the value of the contract and from the potential inability of counterparties to meet the terms of their contracts. Generally, the fund’s maximum risk due to counterparty credit risk is the unrealized gain on the
contract due to the use of Continuous Linked Settlement, a multicurrency cash settlement system for the centralized settlement of foreign transactions. This risk is mitigated in cases where there is an ISDA Master Agreement between the fund and the
counterparty providing for netting as described above and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the counterparty under such ISDA Master Agreement.
Swap Agreements — During
the period the fund entered into swap agreements. Swap agreements generally involve a periodic exchange of cash payments on a net basis, at specified intervals or upon the occurrence of specified events, between the fund and a counterparty. Certain
swap agreements may be entered into as a bilateral contract (“uncleared swaps”) while others are required to be centrally cleared (“cleared swaps”). In a cleared swap transaction, the ultimate counterparty to the transaction
is a clearinghouse (the “clearinghouse”). The contract is transferred and accepted by the clearinghouse immediately following execution of the swap contract with an executing broker. Thereafter, throughout the term of the cleared swap,
the fund interfaces indirectly with the clearinghouse through a clearing broker and has counterparty risk to the clearing broker as well.
Both cleared and uncleared swap agreements are marked to market
daily. The value of uncleared swap agreements is reported in the Statement of Assets and Liabilities as “Uncleared swaps, at value” which includes any related interest accruals to be paid or received by the fund. For cleared swaps,
payments (variation margin) are made or received by the fund each day, depending on the daily fluctuations in the value of the cleared swap, such that only the current day net receivable or payable for variation margin is reported in the Statement
of Assets and Liabilities.
For both cleared and uncleared
swaps, the periodic exchange of net cash payments, at specified intervals or upon the occurrence of specified events as stipulated by the agreement, is recorded as realized gain or loss on swap agreements in the Statement of Operations. Premiums
paid or received at the inception of the agreements are amortized using the effective interest method over the term of the agreement as realized gain or loss on swap agreements in the Statement of Operations. A liquidation payment received or made
upon early termination is recorded as a realized gain or loss on swap agreements in the Statement of Operations. The change in unrealized appreciation or depreciation on swap agreements in the Statement of Operations reflects the aggregate change
over the reporting period in the value of swaps net of any unamortized premiums paid or received.
Risks related to swap agreements include the possible lack of a
liquid market, unfavorable market and interest rate movements of the underlying instrument and the failure of the counterparty to perform under the terms of the agreements. The fund's maximum risk of loss from counterparty credit risk is the
discounted net value of the
59
Notes to Financial
Statements (unaudited) - continued
cash flows to be received from/paid to the counterparty over the contract's
remaining life, to the extent that the amount is positive. To address counterparty risk, uncleared swap agreements are limited to only highly-rated counterparties. Risk is further reduced by having an ISDA Master Agreement between the fund and the
counterparty providing for netting as described above and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the counterparty under such ISDA Master Agreement. The fund's
counterparty risk due to cleared swaps is mitigated by the fact that the clearinghouse is the true counterparty to the transaction and the regulatory requirement safeguards in the event of a clearing broker bankruptcy.
The fund entered into credit default swap agreements in order
to manage its exposure to the market or certain sectors of the market, to reduce its credit risk exposure to defaults of corporate and sovereign issuers or to create exposure to corporate or sovereign issuers to which it is not otherwise exposed. In
a credit default swap agreement, the protection buyer can make an upfront payment and will make a stream of payments to the protection seller based on a fixed percentage applied to the agreement notional amount in exchange for the right to receive a
specified return upon the occurrence of a defined credit event on the reference obligation (which may be either a single security or a basket of securities issued by corporate or sovereign issuers) and, with respect to the cases where physical
settlement applies, the delivery by the buyer to the seller of a defined deliverable obligation. Although agreement-specific, credit events generally consist of a combination of the following: bankruptcy, failure to pay, restructuring, obligation
acceleration, obligation default, or repudiation/moratorium, each as defined in the 2003 ISDA Credit Derivatives Definitions as amended by the relevant agreement. Restructuring is generally not applicable when the reference obligation is issued by a
North American corporation and obligation acceleration, obligation default, or repudiation/moratorium are generally only applicable when the reference obligation is issued by a sovereign entity or an entity in an emerging country. Upon determination
of the final price for the deliverable obligation (or upon delivery of the deliverable obligation in the case of physical settlement), the difference between the value of the deliverable obligation and the swap agreement’s notional amount is
recorded as realized gain or loss on swap agreements in the Statement of Operations.
Credit default swap agreements are considered to have
credit-risk-related contingent features since they trigger payment by the protection seller to the protection buyer upon the occurrence of a defined credit event. The aggregate fair value of credit default swap agreements in a net liability position
as of April 30, 2022 is disclosed in the footnotes to the Portfolio of Investments. The maximum amount of future, undiscounted payments that the fund, as protection seller, could be required to make is equal to the swap agreement’s notional
amount. The protection seller’s payment obligation would be offset to the extent of the value of the agreement’s deliverable obligation. If a defined credit event had occurred as of April 30, 2022, the swap agreement's
credit-risk-related contingent features would have been triggered and, for those swap agreements in a net liability position for which the fund is the protection seller, the fund in order to settle these swap agreements would have been required to
either (1) pay the swap agreement’s notional value of $2,113,000 less the value of the agreements’ related deliverable obligations as decided through an ISDA auction or
60
Notes to Financial
Statements (unaudited) - continued
(2) pay the notional value of the swap agreements in return for physical
receipt of the deliverable obligations. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the agreement.
Security Loans — Under
its Securities Lending Agency Agreement with the fund, JPMorgan Chase and Co., as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated
at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash
and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the
loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the
event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In
return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such
shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. At period end, the fund had investment securities on loan, all of which were classified as equity securities in
the fund's Portfolio of Investments, with a fair value of $522,031. The fair value of the fund's investment securities on loan and a related liability of $537,806 for cash collateral received on securities loaned are both presented gross in the
Statement of Assets and Liabilities. The collateral on securities loaned exceeded the value of securities on loan at period end. The liability for cash collateral for securities loaned is carried at fair value, which is categorized as level 2 within
the fair value hierarchy. A portion of the income generated upon investment of the collateral is remitted to the Borrowers, and the remainder is allocated between the fund and the lending agent. On loans collateralized by U.S. Treasury and/or
federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending agent. Income from securities lending is separately reported in the Statement of Operations. The dividend and interest income earned
on the securities loaned is accounted for in the same manner as other dividend and interest income.
Indemnifications — Under
the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters
into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet
occurred.
Investment Transactions and Income — Investment transactions are recorded on the trade date. Some securities may be purchased or sold on an extended settlement basis, which means that the receipt or delivery
of the securities by the fund and related payments occur at a future date, usually beyond the customary settlement period.
Interest income is recorded on the accrual basis. All premium and discount is
amortized or accreted for financial statement purposes in accordance with U.S. generally accepted
61
Notes to Financial
Statements (unaudited) - continued
accounting principles. Dividends received in cash are recorded on the
ex-dividend date. Certain dividends from foreign securities will be recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis.
Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted upward or downward based on the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. Any increase or
decrease in the principal amount of an inflation-indexed bond is generally recorded as an increase or decrease in interest income, respectively, even though the adjusted principal is not received until maturity.
The fund may receive proceeds from litigation settlements. Any
proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund.
Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.
The fund invests a significant portion of its assets in
asset-backed and/or mortgage-backed securities. For these securities, the value of the debt instrument also depends on the credit quality and adequacy of the underlying assets or collateral as well as whether there is a security interest in the
underlying assets or collateral. Enforcing rights, if any, against the underlying assets or collateral may be difficult. U.S. Government securities not supported as to the payment of principal or interest by the U.S. Treasury, such as those issued
by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, are subject to greater credit risk than are U.S. Government securities supported by the U.S. Treasury, such as those issued by Ginnie Mae.
The fund may purchase or sell mortgage-backed securities on a
“To Be Announced” (TBA) basis. A TBA transaction is subject to extended settlement and typically does not designate the actual security to be delivered, but instead includes an approximate principal amount. The price of the TBA security
and the date that it will be settled are fixed at the time the transaction is negotiated. The value of the security varies with market fluctuations and no interest accrues to the fund until settlement takes place. TBA purchase and sale commitments
are held at carrying amount, which approximates fair value and are categorized as level 2 within the fair value hierarchy and included in TBA purchase and TBA sale commitments in the Statement of Assets and Liabilities. Losses may arise as a result
of changes in the value of the TBA investment prior to settlement date or due to counterparty non-performance. At the time that it enters into a TBA transaction, the fund is required to have sufficient cash and/or liquid securities to cover its
commitments.
The fund may also enter into mortgage dollar
rolls, typically TBA dollar rolls, in which the fund sells TBA mortgage-backed securities to financial institutions and simultaneously agrees to repurchase similar (same issuer, type and coupon) securities at a later date at an agreed-upon price.
During the period between the sale and repurchase, the fund will not be entitled to receive interest and principal payments on the securities sold. The fund accounts for dollar roll transactions as purchases and sales
62
Notes to Financial
Statements (unaudited) - continued
and realizes gains and losses on these transactions. Dollar roll transactions
involve the risk that the market value of the securities that the fund is required to purchase may decline below the agreed upon repurchase price of those securities.
To mitigate the counterparty credit risk on TBA transactions,
mortgage dollar rolls, and other types of forward settling mortgage-backed and asset-backed security transactions, the fund whenever possible enters into a Master Securities Forward Transaction Agreement (“MSFTA”) on a bilateral basis
with each of the counterparties with whom it undertakes a significant volume of transactions. The MSFTA gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a specified deterioration in
the credit quality of the other party. Upon an event of default or a termination of the MSFTA, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net
amount payable by one party to the other. This right to close out and net payments across all transactions traded under the MSFTA could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable by the fund
under the applicable transactions, if any.
For
mortgage-backed and asset-backed securities traded under a MSFTA, the collateral and margining requirements are contract specific. Collateral amounts across all transactions traded under such agreement are netted and an amount is posted from one
party to the other to collateralize such obligations. Cash that has been pledged to cover the fund's collateral or margin obligations under a MSFTA, if any, will be reported separately on the Statement of Assets and Liabilities as restricted cash.
Securities pledged as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments.
Fees Paid Indirectly —
The fund's custody fee may be reduced by a credit earned under an arrangement that measures the value of U.S. dollars deposited with the custodian by the fund. The amount of the credit, for the six months ended April 30, 2022, is shown as a
reduction of total expenses in the Statement of Operations.
Tax Matters and Distributions
— The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As a result, no provision for federal
income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed the fund’s tax positions taken on federal and state
tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability. Foreign taxes, if any, have been accrued by the fund in the accompanying financial statements in
accordance with the applicable foreign tax law. Foreign income taxes may be withheld by certain countries in which the fund invests. Additionally, capital gains realized by the fund on securities issued in or by certain foreign countries may be
subject to capital gains tax imposed by those countries.
Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net
63
Notes to Financial
Statements (unaudited) - continued
asset value per share. Temporary differences which arise from recognizing
certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future.
Book/tax differences primarily relate to amortization and
accretion of debt securities, wash sale loss deferrals, straddle loss deferrals, derivative transactions, and treating a portion of the proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions made during the current
period will be determined at fiscal year end. The tax character of distributions declared to shareholders for the last fiscal year is as follows:
| Year
ended 10/31/21 | |
| Ordinary income (including any short-term capital gains) | $35,867,262 |
| Long-term capital gains | 92,030,890 |
| Total distributions | $127,898,152 |
The federal tax cost and the tax
basis components of distributable earnings were as follows:
| As of 4/30/22 | |
| Cost of investments | $1,387,466,229 |
| Gross appreciation | 281,901,539 |
| Gross depreciation | (94,399,979) |
| Net unrealized appreciation (depreciation) | $ 187,501,560 |
| As of 10/31/21 | |
| Undistributed ordinary income | 17,238,485 |
| Undistributed long-term capital gain | 135,633,098 |
| Other temporary differences | 167,382 |
| Net unrealized appreciation (depreciation) | 379,993,844 |
The aggregate cost above includes
prior fiscal year end tax adjustments, if applicable.
Multiple Classes of Shares of Beneficial Interest — The fund offers multiple classes of shares, which differ in their respective distribution and service fees. The fund's income, realized and unrealized gain (loss), and common expenses are allocated to
shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class C shares will convert
to
64
Notes to Financial
Statements (unaudited) - continued
Class A shares approximately eight years after purchase. The fund’s
distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||
| Class A | $68,649,040 | $53,672,718 | |
| Class B | 1,395,205 | 1,273,029 | |
| Class C | 9,401,182 | 9,445,301 | |
| Class I | 51,893,010 | 42,285,015 | |
| Class R1 | 202,464 | 164,770 | |
| Class R2 | 431,823 | 361,052 | |
| Class R3 | 1,758,530 | 1,519,960 | |
| Class R4 | 506,136 | 497,220 | |
| Class R6 | 23,031,130 | 18,679,087 | |
| Total | $157,268,520 | $127,898,152 |
(3) Transactions with
Affiliates
Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The
management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:
| Up to $500 million | 0.84% |
| In excess of $500 million and up to $1 billion | 0.75% |
| In excess of $1 billion and up to $2.5 billion | 0.70% |
| In excess of $2.5 billion | 0.65% |
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 of Trustees. Effective March 1, 2022, MFS has also 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 of Trustees, but such agreement will continue at least until February 29, 2024. For the six months ended April 30,
2022, this management fee reduction amounted to $121,408, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective
rate of 0.74% of the fund's average daily net assets.
The
investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, and investment-related expenses, such that total fund
operating expenses do not exceed the following rates annually of each class’s average daily net assets:
| Classes | ||||||||
| A | B | C | I | R1 | R2 | R3 | R4 | R6 |
| 1.09% | 1.84% | 1.84% | 0.84% | 1.84% | 1.34% | 1.09% | 0.84% | 0.78% |
65
Notes to Financial
Statements (unaudited) - continued
This written agreement will continue until modified by the
fund’s Board of Trustees, but such agreement will continue at least until February 28, 2023. For the six months ended April 30, 2022, this reduction amounted to $566,935, which is included in the reduction of total expenses in the Statement of
Operations.
Distributor
— MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $32,554 for the six months ended April 30, 2022, as its portion of the initial sales charge on sales of Class A shares of the fund.
The Board of Trustees has adopted a distribution plan for
certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund's distribution plan provides that the fund will pay
MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee
paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| Distribution
Fee Rate (d) |
Service
Fee Rate (d) |
Total
Distribution Plan (d) |
Annual
Effective Rate (e) |
Distribution
and Service Fee | |
| Class A | — | 0.25% | 0.25% | 0.25% | $ 962,485 |
| Class B | 0.75% | 0.25% | 1.00% | 1.00% | 79,373 |
| Class C | 0.75% | 0.25% | 1.00% | 1.00% | 529,483 |
| Class R1 | 0.75% | 0.25% | 1.00% | 1.00% | 11,947 |
| Class R2 | 0.25% | 0.25% | 0.50% | 0.50% | 12,361 |
| Class R3 | — | 0.25% | 0.25% | 0.25% | 23,775 |
| Total Distribution and Service Fees | $1,619,424 |
| (d) | In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the six months ended April 30, 2022 based on each class's average daily net assets. MFD has voluntarily agreed to rebate a portion of each class's 0.25% service fee attributable to accounts for which there is no financial intermediary specified on the account except for accounts attributable to MFS or its affiliates' seed money. For the six months ended April 30, 2022, this rebate amounted to $376 and $3 for Class A and Class B, respectively, and is included in the reduction of total expenses in the Statement of Operations. |
Certain Class A shares are subject to a contingent deferred
sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of
66
Notes to Financial
Statements (unaudited) - continued
purchase. Class C shares are subject to a CDSC in the event of a shareholder
redemption within 12 months of purchase. All contingent deferred sales charges are paid to MFD and during the six months ended April 30, 2022, were as follows:
| Amount | |
| Class A | $8,403 |
| Class B | 3,417 |
| Class C | 2,428 |
Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of the
fund as determined periodically under the supervision of the fund's Board of Trustees. For the six months ended April 30, 2022, the fee was $78,158, which equated to 0.0090% annually of the fund's average daily net assets. MFSC also receives
reimbursement from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. Class R6 shares do not incur sub-accounting fees. For the six months
ended April 30, 2022, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $741,021.
Administrator — MFS
provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is
charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective rate of 0.0145% of the fund's average
daily net assets.
Trustees’ and
Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not
pay compensation directly to Trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration from MFS for their services to the fund. Certain officers and Trustees of the fund are officers or
directors of MFS, MFD, and MFSC.
Other — The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. This money market fund does not pay a
management fee to MFS but does incur investment and operating costs.
The fund is permitted to engage in purchase and sale
transactions with funds and accounts for which MFS serves as investment adviser or sub-adviser (“cross-trades”) pursuant to a policy adopted by the Board of Trustees. This policy has been designed to ensure that cross-trades conducted by
the fund comply with Rule 17a-7 under the Investment Company Act of 1940. During the six months ended April 30, 2022, the fund engaged in sale transactions pursuant to this policy, which amounted to $1,903,265. The sales transactions resulted in net
realized gains (losses) of $6,136.
67
Notes to Financial
Statements (unaudited) - continued
(4) Portfolio Securities
For the six months ended April 30, 2022, purchases and sales of
investments, other than purchased option transactions and short-term obligations, were as follows:
| Purchases | Sales | |
| U.S. Government securities | $128,031,894 | $141,731,765 |
| Non-U.S. Government securities | 505,531,589 | 538,435,887 |
(5) Shares of Beneficial
Interest
The fund's Declaration of Trust permits the
Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Shares sold | |||||
| Class A | 2,069,412 | $37,573,500 | 4,373,697 | $84,778,727 | |
| Class B | 5,237 | 97,927 | 4,856 | 93,924 | |
| Class C | 170,241 | 3,145,391 | 374,840 | 7,327,015 | |
| Class I | 2,584,481 | 46,844,534 | 5,299,816 | 101,702,117 | |
| Class R1 | 15,118 | 267,969 | 10,650 | 208,208 | |
| Class R2 | 36,001 | 641,401 | 41,301 | 792,127 | |
| Class R3 | 247,239 | 4,577,503 | 152,610 | 2,961,078 | |
| Class R4 | 55,203 | 987,365 | 70,946 | 1,392,577 | |
| Class R6 | 1,500,948 | 27,165,521 | 2,836,265 | 54,659,503 | |
| 6,683,880 | $121,301,111 | 13,164,981 | $253,915,276 | ||
| Shares
issued to shareholders in reinvestment of distributions |
|||||
| Class A | 3,411,733 | $62,639,006 | 2,617,171 | $49,281,894 | |
| Class B | 69,343 | 1,307,804 | 61,966 | 1,190,152 | |
| Class C | 481,969 | 8,926,071 | 456,350 | 8,622,444 | |
| Class I | 2,462,203 | 44,579,213 | 1,946,797 | 36,241,395 | |
| Class R1 | 11,015 | 202,464 | 8,773 | 164,770 | |
| Class R2 | 21,167 | 383,969 | 16,877 | 313,997 | |
| Class R3 | 96,147 | 1,758,530 | 81,087 | 1,519,960 | |
| Class R4 | 27,456 | 504,763 | 26,086 | 491,887 | |
| Class R6 | 1,090,877 | 19,748,814 | 855,542 | 15,932,843 | |
| 7,671,910 | $140,050,634 | 6,070,649 | $113,759,342 | ||
68
Notes to Financial
Statements (unaudited) - continued
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Shares reacquired | |||||
| Class A | (3,561,402) | $(65,196,174) | (5,442,782) | $(105,840,131) | |
| Class B | (162,266) | (3,008,901) | (277,760) | (5,539,888) | |
| Class C | (1,098,825) | (20,027,172) | (3,088,516) | (60,085,012) | |
| Class I | (4,376,683) | (79,132,783) | (6,637,545) | (127,588,510) | |
| Class R1 | (9,004) | (161,486) | (31,518) | (612,574) | |
| Class R2 | (45,549) | (800,060) | (84,828) | (1,629,465) | |
| Class R3 | (342,571) | (6,191,556) | (362,528) | (6,909,193) | |
| Class R4 | (31,667) | (595,722) | (154,759) | (3,027,858) | |
| Class R6 | (1,667,568) | (30,086,904) | (3,392,351) | (65,307,757) | |
| (11,295,535) | $(205,200,758) | (19,472,587) | $(376,540,388) | ||
| Net change | |||||
| Class A | 1,919,743 | $35,016,332 | 1,548,086 | $28,220,490 | |
| Class B | (87,686) | (1,603,170) | (210,938) | (4,255,812) | |
| Class C | (446,615) | (7,955,710) | (2,257,326) | (44,135,553) | |
| Class I | 670,001 | 12,290,964 | 609,068 | 10,355,002 | |
| Class R1 | 17,129 | 308,947 | (12,095) | (239,596) | |
| Class R2 | 11,619 | 225,310 | (26,650) | (523,341) | |
| Class R3 | 815 | 144,477 | (128,831) | (2,428,155) | |
| Class R4 | 50,992 | 896,406 | (57,727) | (1,143,394) | |
| Class R6 | 924,257 | 16,827,431 | 299,456 | 5,284,589 | |
| 3,060,255 | $56,150,987 | (236,957) | $(8,865,770) | ||
Effective June 1, 2019, purchases of
the fund’s Class B shares are closed to new and existing investors subject to certain exceptions. Please see the fund’s prospectus for details.
(6) Line of Credit
The fund and certain other funds managed by MFS participate in
a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for
temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of Daily Simple SOFR plus 0.10%, the Federal Funds Effective Rate, and the Overnight Bank Funding Rate, plus an agreed
upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds. In addition, the fund and other funds managed by MFS have established unsecured uncommitted
borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its
69
Notes to Financial
Statements (unaudited) - continued
borrowings, at rates equal to customary reference rates plus an agreed upon
spread. For the six months ended April 30, 2022, the fund’s commitment fee and interest expense were $3,366 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.
(7) Investments in 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 following were affiliated issuers:
| Affiliated Issuers | Beginning
Value |
Purchases | Sales
Proceeds |
Realized
Gain (Loss) |
Change
in Unrealized Appreciation or Depreciation |
Ending
Value |
| MFS Institutional Money Market Portfolio | $57,314,626 | $284,343,916 | $326,145,384 | $167 | $(166) | $15,513,159 |
| Affiliated Issuers | Dividend
Income |
Capital
Gain Distributions |
| MFS Institutional Money Market Portfolio | $22,016 | $— |
(8) LIBOR Transition
Certain of the fund's investments, including investments in
certain debt instruments and derivatives (if any), as well as borrowings by the fund and certain other contractual arrangements of the fund, may be based on the London Interbank Offered Rate (“LIBOR”). In 2017, the regulatory authority
that oversees financial services firms in the United Kingdom announced plans to transition away from LIBOR by the end of 2021. In March 2021, the administrator of LIBOR announced the extension of the publication of the more commonly used U.S. dollar
LIBOR settings to the end of June 2023. Although the full impacts of the transition away from LIBOR are not fully known, the transition may result in, among other things, an increase in volatility or illiquidity of the markets for instruments that
currently rely on LIBOR to determine interest rates and this could have an adverse impact on the fund's performance. With respect to the fund's accounting for investments, including investments in certain debt instruments and derivatives, as well as
borrowings by the fund and any other contractual arrangements of the fund that undergo reference rate-related modifications as a result of the transition, management will rely upon the relief provided by FASB Codification Topic 848 – Reference
Rate Reform (Topic 848). The guidance in Topic 848 permits the fund to account for those modified contracts as a continuation of the existing contracts. Management is still evaluating the impact to the fund of the June 30, 2023 planned
discontinuation of the more commonly used U.S. dollar LIBOR settings.
(9) Russia and Ukraine Conflict
The fund invests in securities and/or derivative instruments
that are economically tied to Russia and/or Ukraine. Escalation of the conflict between Russia and Ukraine in late February 2022 caused market volatility and disruption in the tradability of Russian securities, including closure of the local
securities market, temporary restriction on securities sales by non-residents, and disruptions to clearance and payment systems. To the extent that the fund is unable to sell securities, whether due to market constraints
70
Notes to Financial
Statements (unaudited) - continued
or to the sanctions imposed on Russia by the United States and other
countries, those securities are considered illiquid and the value of those securities reflects their illiquid classification. Management continues to monitor these events and to evaluate the related impacts on fund performance.
71
Statement Regarding
Liquidity Risk Management Program
The fund has adopted
and implemented a liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The fund’s Board of Trustees (the “Board”) has designated MFS as the
administrator of the Program. The Program is reasonably designed to assess and manage the liquidity risk of the fund. Liquidity risk is the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution
of remaining investors' interests.
MFS provided a written
report to the Board for consideration at its March 2022 meeting that addressed the operation of the Program and provided an assessment of the adequacy and effectiveness of the Program during the period from January 1, 2021 to December 31, 2021 (the
“Covered Period”). The report concluded that during the Covered Period the Program had operated effectively in all material respects and had adequately and effectively been implemented to assess and manage the fund’s liquidity
risk. MFS also reported that there were no liquidity events that impacted the fund or its ability to timely meet redemptions without dilution to existing shareholders during the Covered Period.
There can be no assurance that the Program will achieve its
objectives in the future. Further information on liquidity risk, and other principal risks to which an investment in the fund may be subject, can be found in the prospectus.
72
Proxy
Voting Policies and Information
MFS votes proxies on
behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s
Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to
portfolio securities during the most recent twelve-month period ended June 30 is available by August 31 of each year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure
The fund files a complete schedule of portfolio holdings with
the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. A
shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/openendfunds by choosing the fund's name and then scrolling to the
“Resources” section and clicking on the “Prospectus and Reports” tab.
Further Information
From time to time, MFS may post important information about the
fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at
mfs.com/openendfunds by choosing the fund’s name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.
Information About Fund Contracts and Legal Claims
The fund has entered into contractual arrangements with an
investment adviser, administrator, distributor, shareholder servicing agent, 529 program manager (if applicable), and custodian who each provide services to the fund. Unless expressly stated otherwise, shareholders 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.
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.
Provision of Financial Reports and
Summary Prospectuses
The fund produces financial reports
every six months and updates its summary prospectus and prospectus annually. To avoid sending duplicate copies of materials to households, only one copy of the fund’s annual and semiannual report and summary prospectus may be mailed to
shareholders having the same last name and residential address on the fund’s records. However, any shareholder may contact MFSC (please see back cover for address and telephone number) to request that copies of these reports and summary
prospectuses be sent personally to that shareholder.
73
Semiannual Report
April 30, 2022
MFS® Utilities Fund
MMU-SEM
MFS® Utilities
Fund
CONTENTS
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back cover |
The
report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED • MAY LOSE VALUE
• NO BANK GUARANTEE
LETTER FROM THE CHAIR AND
CEO
Dear Shareholders:
Global markets have recently been buffeted by a series of
crosscurrents, including rising inflation, tighter financial conditions, the continued spread of the coronavirus (particularly in Asia), and the evolving geopolitical landscape in the wake of Russia’s invasion of Ukraine. Consequently, at a
time when global growth faces multiple headwinds, central banks have been presented with the challenge of reining in rising prices without tipping economies into recession. The US Federal Reserve has hiked rates at consecutive meetings for the first
time since 2006 and raised rates by more than 0.25% for the first time since 2000. Additional half-point hikes are expected at the Fed’s next two meetings as it seeks to adopt a neutral monetary policy stance before the end of the year. Richly
valued growth equities have been hit particularly hard by higher interest rates, and volatility in credit markets has picked up too.
There are, however, encouraging signs for
the markets. The number of coronavirus cases outside of Asia remains well below prior peaks, and fewer are seriously ill. Meanwhile, unemployment is low and there are signs that some global supply chain bottlenecks are beginning to ease, though
lockdowns in China and disruptions stemming from Russia’s invasion of Ukraine could hamper these advances. Additionally, easier Chinese monetary and regulatory policies and the record pace of corporate stock buybacks are supportive elements,
albeit in an otherwise turbulent investment environment.
It is important to have a deep understanding of company
fundamentals during times of market transition, and we have built our global research platform to do just that.
At MFS®, we put our clients’ assets to work responsibly by carefully navigating increasingly complex global capital markets. Our investment team, guided by a commitment to
long-term fundamental investing, seeks to uncover what we believe are the best, most durable investment ideas in markets around the world. The result — combining collective expertise, long-term discipline, and thoughtful risk management
— is what we consider to be a unique global investment platform that enables us to create value for investors.
Respectfully,
Michael W.
Roberge
Chair and Chief Executive Officer
MFS Investment Management
June 15, 2022
The opinions expressed in this letter are subject to change
and may not be relied upon for investment advice. No forecasts can be guaranteed.
1
Portfolio Composition
| (x) | Represents the portfolio’s exposure to issuer countries as a percentage of a portfolio’s net assets. For purposes of this presentation, United States includes Cash & Cash Equivalents and Other. |
Where the fund holds convertible bonds, they are
treated as part of the equity portion of the portfolio.
Cash & Cash Equivalents includes any cash,
investments in money market funds, short-term securities, and other assets less liabilities. Please see the Statement of Assets and Liabilities for additional information related to the fund’s cash position and other assets and
liabilities.
Other includes equivalent
exposure from currency derivatives and/or any offsets to derivative positions and may be negative.
Percentages are based on net assets as of April 30,
2022.
The portfolio is actively managed and
current holdings may be different.
2
Expense Table
Fund expenses borne by the shareholders during the period,
November 1, 2021 through April 30, 2022
November 1, 2021 through April 30, 2022
As a
shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and
other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period November 1, 2021 through April 30, 2022.
Actual Expenses
The first line for each share class in the following table
provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000
(for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during
this period.
Hypothetical Example for Comparison
Purposes
The second line for each share class in the
following table provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual
return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
3
Expense Table -
continued
| Share
Class |
Annualized
Expense Ratio |
Beginning
Account Value 11/01/21 |
Ending
Account Value 4/30/22 |
Expenses
Paid During Period (p) 11/01/21-4/30/22 | |
| A | Actual | 0.99% | $1,000.00 | $1,050.46 | $5.03 |
| Hypothetical (h) | 0.99% | $1,000.00 | $1,019.89 | $4.96 | |
| B | Actual | 1.74% | $1,000.00 | $1,046.70 | $8.83 |
| Hypothetical (h) | 1.74% | $1,000.00 | $1,016.17 | $8.70 | |
| C | Actual | 1.74% | $1,000.00 | $1,046.73 | $8.83 |
| Hypothetical (h) | 1.74% | $1,000.00 | $1,016.17 | $8.70 | |
| I | Actual | 0.74% | $1,000.00 | $1,051.50 | $3.76 |
| Hypothetical (h) | 0.74% | $1,000.00 | $1,021.12 | $3.71 | |
| R1 | Actual | 1.73% | $1,000.00 | $1,046.23 | $8.78 |
| Hypothetical (h) | 1.73% | $1,000.00 | $1,016.22 | $8.65 | |
| R2 | Actual | 1.24% | $1,000.00 | $1,049.31 | $6.30 |
| Hypothetical (h) | 1.24% | $1,000.00 | $1,018.65 | $6.21 | |
| R3 | Actual | 0.99% | $1,000.00 | $1,050.50 | $5.03 |
| Hypothetical (h) | 0.99% | $1,000.00 | $1,019.89 | $4.96 | |
| R4 | Actual | 0.74% | $1,000.00 | $1,051.69 | $3.76 |
| Hypothetical (h) | 0.74% | $1,000.00 | $1,021.12 | $3.71 | |
| R6 | Actual | 0.65% | $1,000.00 | $1,051.96 | $3.31 |
| Hypothetical (h) | 0.65% | $1,000.00 | $1,021.57 | $3.26 |
| (h) | 5% class return per year before expenses. |
| (p) | “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
4
Portfolio of
Investments
4/30/22 (unaudited)
The Portfolio of Investments is a complete list of all
securities owned by your fund. It is categorized by broad-based asset classes.
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – 97.5% | ||||
| Cable TV – 1.7% | ||||
| Charter Communications, Inc., “A” (a) | 127,066 | $ 54,446,510 | ||
| Energy - Renewables – 5.1% | ||||
| AES Corp. | 2,598,030 | $ 53,051,773 | ||
| EDP Renovaveis S.A. | 4,792,268 | 113,896,520 | ||
| $ 166,948,293 | ||||
| Natural Gas - Distribution – 3.0% | ||||
| Atmos Energy Corp. | 544,185 | $ 61,710,579 | ||
| China Resources Gas Group Ltd. | 5,300,000 | 19,978,346 | ||
| UGI Corp. | 473,425 | 16,238,478 | ||
| $ 97,927,403 | ||||
| Telecommunications - Wireless – 6.1% | ||||
| Cellnex Telecom S.A. | 2,151,637 | $ 100,573,001 | ||
| KDDI Corp. | 585,400 | 19,409,216 | ||
| Rogers Communications, Inc. | 586,479 | 31,947,846 | ||
| SBA Communications Corp., REIT | 140,061 | 48,616,574 | ||
| $ 200,546,637 | ||||
| Telephone Services – 0.7% | ||||
| Hellenic Telecommunications Organization S.A. | 1,220,149 | $ 23,684,410 | ||
| Utilities - Electric Power – 80.9% | ||||
| ALLETE, Inc. | 479,128 | $ 28,431,456 | ||
| Alliant Energy Corp. | 865,531 | 50,901,878 | ||
| Ameren Corp. | 678,138 | 62,999,020 | ||
| American Electric Power Co., Inc. | 1,159,829 | 114,950,652 | ||
| CenterPoint Energy, Inc. | 2,182,485 | 66,805,866 | ||
| Constellation Energy | 1,081,725 | 64,048,937 | ||
| Dominion Energy, Inc. | 2,062,813 | 168,408,053 | ||
| DTE Energy Co. | 838,028 | 109,815,189 | ||
| Duke Energy Corp. | 273,571 | 30,136,581 | ||
| E.ON SE | 2,201,305 | 23,060,109 | ||
| Edison International | 1,559,343 | 107,267,205 | ||
| Electricite de France S.A. | 1,628,890 | 14,728,988 | ||
| Emera, Inc. (l) | 474,423 | 22,907,764 | ||
| Enel S.p.A. | 12,730,005 | 82,274,806 | ||
| Energias de Portugal S.A. | 8,226,319 | 38,299,187 | ||
| Energisa S.A., IEU | 1,002,900 | 9,663,964 | ||
| Entergy Corp. | 652,648 | 77,567,215 | ||
5
Portfolio of
Investments (unaudited) – continued
| Issuer | Shares/Par | Value ($) | ||
| Common Stocks – continued | ||||
| Utilities - Electric Power – continued | ||||
| Equatorial Energia S.A. | 3,330,800 | $ 17,273,984 | ||
| Evergy, Inc. | 1,054,093 | 71,520,210 | ||
| Exelon Corp. | 2,632,012 | 123,125,521 | ||
| FirstEnergy Corp. | 1,690,353 | 73,209,189 | ||
| Iberdrola S.A. | 9,325,674 | 106,552,554 | ||
| National Grid PLC | 2,467,345 | 36,684,900 | ||
| Neoenergia S.A. | 2,903,100 | 11,027,664 | ||
| NextEra Energy, Inc. | 4,213,075 | 299,212,587 | ||
| PG&E Corp. (a) | 10,930,213 | 138,267,195 | ||
| Pinnacle West Capital Corp. | 577,081 | 41,088,167 | ||
| Portland General Electric Co. | 332,060 | 15,716,400 | ||
| PPL Corp. | 1,132,471 | 32,060,254 | ||
| Public Service Enterprise Group, Inc. | 935,049 | 65,135,513 | ||
| RWE AG | 2,240,742 | 93,585,644 | ||
| Sempra Energy | 1,092,290 | 176,251,914 | ||
| Southern Co. | 2,105,011 | 154,486,757 | ||
| SSE PLC | 4,531,308 | 105,552,408 | ||
| Vistra Corp. | 574,260 | 14,367,985 | ||
| $ 2,647,385,716 | ||||
| Total Common Stocks (Identified Cost, $2,255,770,977) | $ 3,190,938,969 | |||
| Convertible Preferred Stocks – 0.5% | ||||
| Utilities - Electric Power – 0.5% | ||||
| DTE Energy Co., 6.25% | 175,400 | $ 9,190,960 | ||
| NextEra Energy, Inc., 5.279% | 175,500 | 8,232,705 | ||
| Total Convertible Preferred Stocks (Identified Cost, $14,864,754) | $ 17,423,665 | |||
| Investment Companies (h) – 1.4% | ||||
| Money Market Funds – 1.4% | ||||
| MFS Institutional Money Market Portfolio, 0.28% (v) (Identified Cost, $45,209,108) | 45,209,108 | $ 45,209,108 | ||
| Other Assets, Less Liabilities – 0.6% | 19,012,992 | |||
| Net Assets – 100.0% | $ 3,272,584,734 | |||
| (a) | Non-income producing security. | |||
| (h) | An affiliated issuer, which 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. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $45,209,108 and $3,208,362,634, respectively. | |||
| (l) | A portion of this security is on loan. See Note 2 for additional information. |
6
Portfolio of
Investments (unaudited) – continued
| (v) | Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end. |
| The following abbreviations are used in this report and are defined: | |
| IEU | International Equity Unit |
| REIT | Real Estate Investment Trust |
| Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below: | |
| CAD | Canadian Dollar |
| EUR | Euro |
| GBP | British Pound |
Derivative Contracts at
4/30/22
| Forward Foreign Currency Exchange Contracts | ||||||
| Currency
Purchased |
Currency
Sold |
Counterparty | Settlement
Date |
Unrealized
Appreciation (Depreciation) | ||
| Asset Derivatives | ||||||
| USD | 4,344,505 | CAD | 5,489,000 | Merrill Lynch International | 7/15/2022 | $72,917 |
| USD | 35,829,000 | CAD | 44,901,153 | UBS AG | 7/15/2022 | 886,528 |
| USD | 290,923,859 | EUR | 264,216,823 | BNP Paribas S.A. | 7/15/2022 | 11,116,148 |
| USD | 96,982,293 | EUR | 88,540,407 | JPMorgan Chase Bank N.A. | 7/15/2022 | 3,217,299 |
| USD | 2,713,590 | EUR | 2,484,136 | Morgan Stanley Capital Services, Inc. | 7/15/2022 | 82,870 |
| USD | 81,958,084 | GBP | 62,498,396 | Deutsche Bank AG | 7/15/2022 | 3,347,224 |
| USD | 7,921,078 | GBP | 6,039,000 | Merrill Lynch International | 7/15/2022 | 325,188 |
| $19,048,174 | ||||||
| Liability Derivatives | ||||||
| CAD | 2,507,527 | USD | 1,982,851 | Merrill Lynch International | 7/15/2022 | $(31,472) |
| EUR | 357,864 | USD | 395,207 | Citibank N.A. | 7/15/2022 | (16,226) |
| $(47,698) | ||||||
See Notes to Financial
Statements
7
Financial Statements
Statement of Assets and Liabilities
At 4/30/22 (unaudited)
This statement represents your fund’s balance sheet,
which details the assets and liabilities comprising the total value of the fund.
| Assets | |
| Investments in unaffiliated issuers, at value, including $11,513,307 of securities on loan (identified cost, $2,270,635,731) | $3,208,362,634 |
| Investments in affiliated issuers, at value (identified cost, $45,209,108) | 45,209,108 |
| Foreign currency, at value (identified cost, $126,814) | 129,435 |
| Receivables for | |
| Forward foreign currency exchange contracts | 19,048,174 |
| Fund shares sold | 5,166,790 |
| Interest and dividends | 6,355,349 |
| Other assets | 40,619 |
| Total assets | $3,284,312,109 |
| Liabilities | |
| Payable to custodian | $141,270 |
| Payables for | |
| Forward foreign currency exchange contracts | 47,698 |
| Investments purchased | 8,386,459 |
| Fund shares reacquired | 1,868,334 |
| Payable to affiliates | |
| Investment adviser | 158,415 |
| Administrative services fee | 4,651 |
| Shareholder servicing costs | 895,831 |
| Distribution and service fees | 62,524 |
| Payable for independent Trustees' compensation | 7,891 |
| Accrued expenses and other liabilities | 154,302 |
| Total liabilities | $11,727,375 |
| Net assets | $3,272,584,734 |
| Net assets consist of | |
| Paid-in capital | $2,196,981,726 |
| Total distributable earnings (loss) | 1,075,603,008 |
| Net assets | $3,272,584,734 |
| Shares of beneficial interest outstanding | 134,074,714 |
8
Statement of Assets and
Liabilities (unaudited) – continued
| Net assets | Shares
outstanding |
Net
asset value per share (a) | |
| Class A | $1,985,402,265 | 81,410,841 | $24.39 |
| Class B | 42,103,365 | 1,737,098 | 24.24 |
| Class C | 132,542,980 | 5,468,671 | 24.24 |
| Class I | 732,554,803 | 29,883,562 | 24.51 |
| Class R1 | 4,984,636 | 206,394 | 24.15 |
| Class R2 | 40,091,577 | 1,649,982 | 24.30 |
| Class R3 | 217,121,301 | 8,910,336 | 24.37 |
| Class R4 | 27,121,425 | 1,110,568 | 24.42 |
| Class R6 | 90,662,382 | 3,697,262 | 24.52 |
| (a) | Maximum offering price per share was equal to the net asset value per share for all share classes, except for Class A, for which the maximum offering price per share was $25.88 [100 / 94.25 x $24.39]. On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares. Redemption price per share was equal to the net asset value per share for Classes I, R1, R2, R3, R4, and R6. |
See Notes to Financial Statements
9
Financial Statements
Statement of Operations
Six months ended 4/30/22 (unaudited)
This statement describes how much your fund earned in
investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.
| Net investment income (loss) | |
| Income | |
| Dividends | $46,983,522 |
| Other | 88,363 |
| Income on securities loaned | 41,345 |
| Dividends from affiliated issuers | 18,837 |
| Foreign taxes withheld | (1,445,934) |
| Total investment income | $45,686,133 |
| Expenses | |
| Management fee | $9,518,673 |
| Distribution and service fees | 3,741,971 |
| Shareholder servicing costs | 1,752,151 |
| Administrative services fee | 227,625 |
| Independent Trustees' compensation | 22,073 |
| Custodian fee | 182,380 |
| Shareholder communications | 67,869 |
| Audit and tax fees | 32,912 |
| Legal fees | 7,706 |
| Miscellaneous | 111,033 |
| Total expenses | $15,664,393 |
| Fees paid indirectly | (1,617) |
| Reduction of expenses by investment adviser and distributor | (223,423) |
| Net expenses | $15,439,353 |
| Net investment income (loss) | $30,246,780 |
| Realized and unrealized gain (loss) | |
| Realized gain (loss) (identified cost basis) | |
| Unaffiliated issuers (net of $798,164 country tax) | $99,150,432 |
| Forward foreign currency exchange contracts | 28,863,466 |
| Foreign currency | (137,005) |
| Net realized gain (loss) | $127,876,893 |
| Change in unrealized appreciation or depreciation | |
| Unaffiliated issuers (net of $246,880 decrease in deferred country tax) | $(18,124,915) |
| Forward foreign currency exchange contracts | 17,659,986 |
| Translation of assets and liabilities in foreign currencies | (102,957) |
| Net unrealized gain (loss) | $(567,886) |
| Net realized and unrealized gain (loss) | $127,309,007 |
| Change in net assets from operations | $157,555,787 |
See Notes to Financial
Statements
10
Financial Statements
Statements of Changes in Net Assets
These statements describe the increases and/or decreases in
net assets resulting from operations, any distributions, and any shareholder transactions.
| Six months ended | Year ended | |
| 4/30/22
(unaudited) |
10/31/21 | |
| Change in net assets | ||
| From operations | ||
| Net investment income (loss) | $30,246,780 | $63,220,532 |
| Net realized gain (loss) | 127,876,893 | 89,255,386 |
| Net unrealized gain (loss) | (567,886) | 392,059,377 |
| Change in net assets from operations | $157,555,787 | $544,535,295 |
| Total distributions to shareholders | $(165,075,961) | $(161,630,114) |
| Change in net assets from fund share transactions | $88,471,573 | $(204,657,745) |
| Total change in net assets | $80,951,399 | $178,247,436 |
| Net assets | ||
| At beginning of period | 3,191,633,335 | 3,013,385,899 |
| At end of period | $3,272,584,734 | $3,191,633,335 |
See Notes to Financial
Statements
11
Financial
Statements
Financial Highlights
The financial highlights table is intended to help you
understand the fund's financial performance for the semiannual period and the past 5 fiscal years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
| Class A |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.45 | $21.65 | $23.54 | $20.08 | $20.46 | $18.49 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.23 | $0.46 | $0.54 | $0.55 | $0.55 | $0.51(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.52 | (0.93) | 3.73 | (0.35) | 2.15 |
| Total from investment operations | $1.21 | $3.98 | $(0.39) | $4.28 | $0.20 | $2.66 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.21) | $(0.26) | $(0.31) | $(0.49) | $(0.50) | $(0.69) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.27) | $(1.18) | $(1.50) | $(0.82) | $(0.58) | $(0.69) |
| Net asset value, end of period (x) | $24.39 | $24.45 | $21.65 | $23.54 | $20.08 | $20.46 |
| Total return (%) (r)(s)(t)(x) | 5.05(n) | 18.90 | (1.70) | 21.94 | 0.98 | 14.73(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.00(a) | 1.00 | 1.00 | 1.00 | 1.00 | 1.01(c) |
| Expenses after expense reductions (f) | 0.99(a) | 0.99 | 0.99 | 0.99 | 0.99 | 1.01(c) |
| Net investment income (loss) | 1.88(a) | 1.98 | 2.51 | 2.51 | 2.70 | 2.64(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $1,985,402 | $1,951,571 | $1,744,515 | $1,956,524 | $1,706,956 | $1,951,500 |
See Notes to Financial
Statements
12
Financial
Highlights – continued
| Class B |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.30 | $21.53 | $23.42 | $19.98 | $20.36 | $18.40 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.14 | $0.30 | $0.38 | $0.38 | $0.39 | $0.36(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.49 | (0.93) | 3.72 | (0.35) | 2.14 |
| Total from investment operations | $1.12 | $3.79 | $(0.55) | $4.10 | $0.04 | $2.50 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.12) | $(0.10) | $(0.15) | $(0.33) | $(0.34) | $(0.54) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.18) | $(1.02) | $(1.34) | $(0.66) | $(0.42) | $(0.54) |
| Net asset value, end of period (x) | $24.24 | $24.30 | $21.53 | $23.42 | $19.98 | $20.36 |
| Total return (%) (r)(s)(t)(x) | 4.67(n) | 18.02 | (2.45) | 21.02 | 0.22 | 13.87(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.75(a) | 1.75 | 1.75 | 1.75 | 1.75 | 1.76(c) |
| Expenses after expense reductions (f) | 1.74(a) | 1.74 | 1.74 | 1.74 | 1.74 | 1.76(c) |
| Net investment income (loss) | 1.15(a) | 1.27 | 1.75 | 1.76 | 1.94 | 1.89(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $42,103 | $49,750 | $63,594 | $99,924 | $113,779 | $156,814 |
See Notes to Financial
Statements
13
Financial
Highlights – continued
| Class C |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.30 | $21.53 | $23.42 | $19.98 | $20.36 | $18.40 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.14 | $0.30 | $0.38 | $0.38 | $0.38 | $0.36(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.49 | (0.93) | 3.72 | (0.34) | 2.14 |
| Total from investment operations | $1.12 | $3.79 | $(0.55) | $4.10 | $0.04 | $2.50 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.12) | $(0.10) | $(0.15) | $(0.33) | $(0.34) | $(0.54) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.18) | $(1.02) | $(1.34) | $(0.66) | $(0.42) | $(0.54) |
| Net asset value, end of period (x) | $24.24 | $24.30 | $21.53 | $23.42 | $19.98 | $20.36 |
| Total return (%) (r)(s)(t)(x) | 4.67(n) | 18.00 | (2.45) | 21.02 | 0.21 | 13.87(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.75(a) | 1.75 | 1.75 | 1.75 | 1.75 | 1.76(c) |
| Expenses after expense reductions (f) | 1.74(a) | 1.74 | 1.74 | 1.74 | 1.74 | 1.76(c) |
| Net investment income (loss) | 1.14(a) | 1.28 | 1.76 | 1.75 | 1.91 | 1.90(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $132,543 | $149,761 | $230,614 | $370,036 | $424,769 | $640,795 |
See Notes to Financial
Statements
14
Financial
Highlights – continued
| Class I |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.57 | $21.74 | $23.64 | $20.16 | $20.54 | $18.56 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.26 | $0.53 | $0.60 | $0.60 | $0.60 | $0.56(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.54 | (0.94) | 3.76 | (0.35) | 2.16 |
| Total from investment operations | $1.24 | $4.07 | $(0.34) | $4.36 | $0.25 | $2.72 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.24) | $(0.32) | $(0.37) | $(0.55) | $(0.55) | $(0.74) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.30) | $(1.24) | $(1.56) | $(0.88) | $(0.63) | $(0.74) |
| Net asset value, end of period (x) | $24.51 | $24.57 | $21.74 | $23.64 | $20.16 | $20.54 |
| Total return (%) (r)(s)(t)(x) | 5.15(n) | 19.23 | (1.49) | 22.26 | 1.22 | 15.02(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.75(a) | 0.75 | 0.75 | 0.75 | 0.75 | 0.76(c) |
| Expenses after expense reductions (f) | 0.74(a) | 0.74 | 0.74 | 0.74 | 0.74 | 0.76(c) |
| Net investment income (loss) | 2.12(a) | 2.24 | 2.76 | 2.77 | 2.93 | 2.86(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $732,555 | $687,188 | $626,500 | $698,558 | $587,221 | $682,272 |
See Notes to Financial
Statements
15
Financial
Highlights – continued
| Class R1 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.23 | $21.47 | $23.37 | $19.94 | $20.32 | $18.37 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.13 | $0.28 | $0.37 | $0.38 | $0.39 | $0.36(c) |
| Net realized and unrealized gain (loss) | 0.97 | 3.51 | (0.92) | 3.71 | (0.34) | 2.13 |
| Total from investment operations | $1.10 | $3.79 | $(0.55) | $4.09 | $0.05 | $2.49 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.12) | $(0.11) | $(0.16) | $(0.33) | $(0.35) | $(0.54) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.18) | $(1.03) | $(1.35) | $(0.66) | $(0.43) | $(0.54) |
| Net asset value, end of period (x) | $24.15 | $24.23 | $21.47 | $23.37 | $19.94 | $20.32 |
| Total return (%) (r)(s)(t)(x) | 4.62(n) | 18.06 | (2.48) | 21.03 | 0.23 | 13.84(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.75(a) | 1.75 | 1.75 | 1.75 | 1.75 | 1.76(c) |
| Expenses after expense reductions (f) | 1.73(a) | 1.74 | 1.74 | 1.74 | 1.74 | 1.76(c) |
| Net investment income (loss) | 1.14(a) | 1.23 | 1.75 | 1.77 | 1.93 | 1.90(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $4,985 | $5,126 | $5,171 | $6,561 | $6,453 | $7,623 |
See Notes to Financial
Statements
16
Financial
Highlights – continued
| Class R2 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.36 | $21.58 | $23.47 | $20.03 | $20.40 | $18.44 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.20 | $0.41 | $0.48 | $0.49 | $0.50 | $0.46(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.50 | (0.92) | 3.72 | (0.35) | 2.14 |
| Total from investment operations | $1.18 | $3.91 | $(0.44) | $4.21 | $0.15 | $2.60 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.18) | $(0.21) | $(0.26) | $(0.44) | $(0.44) | $(0.64) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.24) | $(1.13) | $(1.45) | $(0.77) | $(0.52) | $(0.64) |
| Net asset value, end of period (x) | $24.30 | $24.36 | $21.58 | $23.47 | $20.03 | $20.40 |
| Total return (%) (r)(s)(t)(x) | 4.93(n) | 18.60 | (1.96) | 21.59 | 0.77 | 14.42(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.25(a) | 1.25 | 1.25 | 1.25 | 1.25 | 1.26(c) |
| Expenses after expense reductions (f) | 1.24(a) | 1.24 | 1.24 | 1.24 | 1.24 | 1.26(c) |
| Net investment income (loss) | 1.63(a) | 1.74 | 2.26 | 2.26 | 2.46 | 2.39(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $40,092 | $41,968 | $41,020 | $59,224 | $57,733 | $78,248 |
See Notes to Financial
Statements
17
Financial
Highlights – continued
| Class R3 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.43 | $21.63 | $23.52 | $20.07 | $20.45 | $18.48 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.22 | $0.47 | $0.54 | $0.57 | $0.55 | $0.51(c) |
| Net realized and unrealized gain (loss) | 0.99 | 3.51 | (0.93) | 3.71 | (0.35) | 2.15 |
| Total from investment operations | $1.21 | $3.98 | $(0.39) | $4.28 | $0.20 | $2.66 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.21) | $(0.26) | $(0.31) | $(0.50) | $(0.50) | $(0.69) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.27) | $(1.18) | $(1.50) | $(0.83) | $(0.58) | $(0.69) |
| Net asset value, end of period (x) | $24.37 | $24.43 | $21.63 | $23.52 | $20.07 | $20.45 |
| Total return (%) (r)(s)(t)(x) | 5.05(n) | 18.91 | (1.71) | 21.92 | 0.97 | 14.74(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 1.00(a) | 1.00 | 1.00 | 1.00 | 1.00 | 1.01(c) |
| Expenses after expense reductions (f) | 0.99(a) | 0.99 | 0.99 | 0.99 | 0.99 | 1.01(c) |
| Net investment income (loss) | 1.88(a) | 1.99 | 2.51 | 2.63 | 2.71 | 2.64(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $217,121 | $201,006 | $201,509 | $279,639 | $72,490 | $99,454 |
See Notes to Financial
Statements
18
Financial
Highlights – continued
| Class R4 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.48 | $21.67 | $23.56 | $20.10 | $20.48 | $18.51 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.26 | $0.53 | $0.60 | $0.60 | $0.61 | $0.56(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.52 | (0.93) | 3.74 | (0.36) | 2.15 |
| Total from investment operations | $1.24 | $4.05 | $(0.33) | $4.34 | $0.25 | $2.71 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.24) | $(0.32) | $(0.37) | $(0.55) | $(0.55) | $(0.74) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.30) | $(1.24) | $(1.56) | $(0.88) | $(0.63) | $(0.74) |
| Net asset value, end of period (x) | $24.42 | $24.48 | $21.67 | $23.56 | $20.10 | $20.48 |
| Total return (%) (r)(s)(t)(x) | 5.17(n) | 19.19 | (1.46) | 22.22 | 1.22 | 15.01(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.75(a) | 0.75 | 0.75 | 0.75 | 0.75 | 0.76(c) |
| Expenses after expense reductions (f) | 0.74(a) | 0.74 | 0.74 | 0.74 | 0.74 | 0.76(c) |
| Net investment income (loss) | 2.12(a) | 2.25 | 2.76 | 2.76 | 3.01 | 2.89(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $27,121 | $25,766 | $24,920 | $49,530 | $48,109 | $79,612 |
See Notes to Financial
Statements
19
Financial
Highlights – continued
| Class R6 |
Six months ended |
Year ended | ||||
| 4/30/22
(unaudited) |
10/31/21 | 10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | |
| Net asset value, beginning of period | $24.58 | $21.75 | $23.64 | $20.17 | $20.54 | $18.56 |
| Income (loss) from investment operations | ||||||
| Net investment income (loss) (d) | $0.27 | $0.54 | $0.61 | $0.61 | $0.61 | $0.57(c) |
| Net realized and unrealized gain (loss) | 0.98 | 3.54 | (0.92) | 3.76 | (0.34) | 2.17 |
| Total from investment operations | $1.25 | $4.08 | $(0.31) | $4.37 | $0.27 | $2.74 |
| Less distributions declared to shareholders | ||||||
| From net investment income | $(0.25) | $(0.33) | $(0.39) | $(0.57) | $(0.56) | $(0.76) |
| From net realized gain | (1.06) | (0.92) | (1.19) | (0.33) | (0.08) | — |
| Total distributions declared to shareholders | $(1.31) | $(1.25) | $(1.58) | $(0.90) | $(0.64) | $(0.76) |
| Net asset value, end of period (x) | $24.52 | $24.58 | $21.75 | $23.64 | $20.17 | $20.54 |
| Total return (%) (r)(s)(t)(x) | 5.20(n) | 19.31 | (1.36) | 22.29 | 1.36 | 15.13(c) |
| Ratios
(%) (to average net assets) and Supplemental data: | ||||||
| Expenses before expense reductions (f) | 0.66(a) | 0.66 | 0.66 | 0.66 | 0.66 | 0.66(c) |
| Expenses after expense reductions (f) | 0.65(a) | 0.65 | 0.65 | 0.65 | 0.65 | 0.66(c) |
| Net investment income (loss) | 2.21(a) | 2.29 | 2.84 | 2.84 | 3.02 | 2.93(c) |
| Portfolio turnover | 15(n) | 12 | 30 | 30 | 23 | 24 |
| Net assets at end of period (000 omitted) | $90,662 | $79,499 | $75,542 | $92,437 | $119,752 | $136,631 |
| (a) | Annualized. |
| (c) | Amount reflects a one-time reimbursement of expenses by the custodian (or former custodian) without which net investment income and performance would be lower and expenses would be higher. |
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. See Note 2 in the Notes to Financial Statements for additional information. |
| (n) | Not annualized. |
| (r) | Certain expenses have been reduced without which performance would have been lower. |
| (s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
| (t) | Total returns do not include any applicable sales charges. |
| (x) | The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes. |
See Notes to Financial Statements
20
Notes to Financial
Statements
(unaudited)
(1) Business and Organization
MFS Utilities Fund (the fund) is a diversified series of MFS
Series Trust VI (the trust). The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
The fund is an investment company and accordingly follows the
investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services - Investment Companies.
(2) Significant Accounting Policies
General — The preparation
of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these
financial statements, management has evaluated subsequent events occurring after the date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued.
The fund invests primarily in securities of issuers in the utility industry. Issuers in a single industry can react similarly to market, currency, political, economic, regulatory, geopolitical, environmental, public health, and other conditions. The
value of stocks in the utilities sector can be very volatile due to supply and/or demand for services or fuel, financing costs, conservation efforts, the negative impact of regulation, and other factors. The
fund invests in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s market, economic,
industrial, political, regulatory, geopolitical, environmental, public health, and other conditions.
Balance Sheet Offsetting
— The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement, or
similar agreement, does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the fund and the applicable counterparty. The fund's right to
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to the
fund, have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.
Investment Valuations
— Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price 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. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Forward foreign currency
21
Notes to Financial
Statements (unaudited) - continued
exchange contracts are generally 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. 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. In determining values, 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 halt 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 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 effect 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. 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
22
Notes to Financial
Statements (unaudited) - continued
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, such as forward foreign currency exchange contracts. The following is a summary of the levels used as of April 30, 2022 in valuing the fund's assets
and liabilities:
| Financial Instruments | Level 1 | Level 2 | Level 3 | Total |
| Equity Securities: | ||||
| United States | $2,337,261,323 | $— | $— | $2,337,261,323 |
| Spain | — | 207,125,555 | — | 207,125,555 |
| Portugal | — | 152,195,707 | — | 152,195,707 |
| United Kingdom | — | 142,237,308 | — | 142,237,308 |
| Germany | 116,645,753 | — | — | 116,645,753 |
| Italy | — | 82,274,806 | — | 82,274,806 |
| Canada | 54,855,610 | — | — | 54,855,610 |
| Brazil | 37,965,612 | — | — | 37,965,612 |
| Greece | 23,684,410 | — | — | 23,684,410 |
| Other Countries | — | 54,116,550 | — | 54,116,550 |
| Mutual Funds | 45,209,108 | — | — | 45,209,108 |
| Total | $2,615,621,816 | $637,949,926 | $— | $3,253,571,742 |
| Other Financial Instruments | ||||
| Forward Foreign Currency Exchange Contracts – Assets | $— | $19,048,174 | $— | $19,048,174 |
| Forward Foreign Currency Exchange Contracts – Liabilities | — | (47,698) | — | (47,698) |
For further information regarding
security characteristics, see the Portfolio of Investments.
Foreign Currency Translation
— Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions or on the reporting date for foreign denominated
receivables and payables. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign
exchange rate movements on receivables, payables, income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not separately disclosed.
Derivatives — The fund
uses derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease interest rate or currency exposure, or as alternatives to direct investments. Derivatives are used for
hedging or non-hedging purposes. While hedging can reduce or eliminate
23
Notes to Financial
Statements (unaudited) - continued
losses, it can also reduce or eliminate gains. When the fund uses derivatives
as an investment to increase market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost.
The derivative instruments used by the fund during the period
were forward foreign currency exchange contracts. Depending on the type of derivative, a fund may exit a derivative position by entering into an offsetting transaction with a counterparty or exchange, negotiating an agreement with the derivative
counterparty, or novating the position to a third party. The fund's period end derivatives, as presented in the Portfolio of Investments and the associated Derivative Contract tables, generally are indicative of the volume of its derivative activity
during the period.
The following table presents, by major
type of derivative contract, the fair value, on a gross basis, of the asset and liability components of derivatives held by the fund at April 30, 2022 as reported in the Statement of Assets and Liabilities:
| Fair Value | |||
| Risk | Derivative Contracts | Asset Derivatives | Liability Derivatives |
| Foreign Exchange | Forward Foreign Currency Exchange Contracts | $19,048,174 | $(47,698) |
The following table presents, by
major type of derivative contract, the realized gain (loss) on derivatives held by the fund for the six months ended April 30, 2022 as reported in the Statement of Operations:
| Risk | Forward
Foreign Currency Exchange Contracts |
| Foreign Exchange | $28,863,466 |
The following table presents, by
major type of derivative contract, the change in unrealized appreciation or depreciation on derivatives held by the fund for the six months ended April 30, 2022 as reported in the Statement of Operations:
| Risk | Forward
Foreign Currency Exchange Contracts |
| Foreign Exchange | $17,659,986 |
Derivative counterparty credit risk
is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared derivatives, the fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an
ISDA Master Agreement on a bilateral basis. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a specified deterioration in the credit quality of the other
party. Upon an event of default or a termination of the ISDA Master Agreement, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each agreement to one net amount payable by
one party to the other. This right to close out and net payments
24
Notes to Financial
Statements (unaudited) - continued
across all transactions traded under the ISDA Master Agreement could result in
a reduction of the fund's credit risk to such counterparty equal to any amounts payable by the fund under the applicable transactions, if any.
Collateral and margin requirements differ by type of
derivative. For cleared derivatives (e.g., futures contracts, cleared swaps, and exchange-traded options), margin requirements are set by the clearing broker and the clearing house and collateral, in the form of cash or securities, is posted by the
fund directly with the clearing broker. Collateral terms are counterparty agreement specific for uncleared derivatives (e.g., forward foreign currency exchange contracts, uncleared swap agreements, and uncleared options) and collateral, in the form
of cash and securities, is held in segregated accounts with the fund's custodian in connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a collateral support annex, the collateral requirements are
netted across all transactions traded under such counterparty-specific agreement and an amount is posted from one party to the other to collateralize such obligations. Cash that has been segregated or delivered to cover the fund's collateral or
margin obligations under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities as restricted cash for uncleared derivatives and/or deposits with brokers for cleared derivatives. Securities pledged as
collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in
“Miscellaneous” expense in the Statement of Operations.
Forward Foreign Currency Exchange Contracts — The fund entered into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. These contracts may be used to hedge the fund’s
currency risk or for non-hedging purposes. For hedging purposes, the fund may enter into contracts to deliver or receive foreign currency that the fund will receive from or use in its normal investment activities. The fund may also use contracts to
hedge against declines in the value of foreign currency denominated securities due to unfavorable exchange rate movements. For non-hedging purposes, the fund may enter into contracts with the intent of changing the relative exposure of the
fund’s portfolio of securities to different currencies to take advantage of anticipated exchange rate changes.
Forward foreign currency exchange contracts are adjusted by the
daily exchange rate of the underlying currency and any unrealized gains or losses are recorded as a receivable or payable for forward foreign currency exchange contracts until the contract settlement date. On contract settlement date, any gain or
loss on the contract is recorded as realized gains or losses on forward foreign currency exchange contracts.
Risks may arise upon entering into these contracts from
unanticipated movements in the value of the contract and from the potential inability of counterparties to meet the terms of their contracts. Generally, the fund’s maximum risk due to counterparty credit risk is the unrealized gain on the
contract due to the use of Continuous Linked Settlement, a multicurrency cash settlement system for the centralized settlement of foreign transactions. This risk is mitigated in cases where there is an ISDA Master Agreement between the fund and the
counterparty providing for netting as described above and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the counterparty under such ISDA Master Agreement.
25
Notes to Financial
Statements (unaudited) - continued
Security Loans — Under
its Securities Lending Agency Agreement with the fund, JPMorgan Chase and Co., as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated
at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash
and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the
loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the
event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In
return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such
shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. At period end, the fund had investment securities on loan, all of which were classified as equity securities in
the fund’s Portfolio of Investments, with a fair value of $11,513,307. The fair value of the fund’s investment securities on loan is presented gross in the Statement of Assets and Liabilities. These loans were collateralized by U.S.
Treasury Obligations of $12,521,888 held by the lending agent. The collateral on securities loaned exceeded the value of securities on loan at period end. A portion of the income generated upon investment of the collateral is remitted to the
Borrowers, and the remainder is allocated between the fund and the lending agent. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending
agent. Income from securities lending is separately reported in the Statement of Operations. The dividend and interest income earned on the securities loaned is accounted for in the same manner as other dividend and interest income.
Indemnifications — Under
the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters
into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet
occurred.
Investment Transactions and Income — Investment transactions are recorded on the trade date. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be
recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend payments received in additional securities are recorded on the ex-dividend date in an amount equal to the value of the
security on such date. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis.
26
Notes to Financial
Statements (unaudited) - continued
The fund may receive proceeds from litigation settlements. Any
proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund.
Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.
Fees Paid Indirectly —
The fund's custody fee may be reduced by a credit earned under an arrangement that measures the value of U.S. dollars deposited with the custodian by the fund. The amount of the credit, for the six months ended April 30, 2022, is shown as a
reduction of total expenses in the Statement of Operations.
Tax Matters and Distributions
— The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As a result, no provision for federal
income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed the fund’s tax positions taken on federal and state
tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability. Foreign taxes, if any, have been accrued by the fund in the accompanying financial statements in
accordance with the applicable foreign tax law. Foreign income taxes may be withheld by certain countries in which the fund invests. Additionally, capital gains realized by the fund on securities issued in or by certain foreign countries may be
subject to capital gains tax imposed by those countries.
Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in
different periods for financial statement and tax purposes will reverse at some time in the future.
Book/tax differences primarily relate to wash sale loss
deferrals, derivative transactions, and certain preferred stock treated as debt for tax purposes.
The tax character of distributions made during the current
period will be determined at fiscal year end. The tax character of distributions declared to shareholders for the last fiscal year is as follows:
| Year
ended 10/31/21 | |
| Ordinary income (including any short-term capital gains) | $35,726,050 |
| Long-term capital gains | 125,904,064 |
| Total distributions | $161,630,114 |
27
Notes to Financial
Statements (unaudited) - continued
The federal tax cost and the tax basis components of
distributable earnings were as follows:
| As of 4/30/22 | |
| Cost of investments | $2,328,341,124 |
| Gross appreciation | 934,817,480 |
| Gross depreciation | (9,586,862) |
| Net unrealized appreciation (depreciation) | $ 925,230,618 |
| As of 10/31/21 | |
| Undistributed ordinary income | 23,603,383 |
| Undistributed long-term capital gain | 113,496,113 |
| Other temporary differences | (46,905) |
| Net unrealized appreciation (depreciation) | 946,070,591 |
The aggregate cost above includes
prior fiscal year end tax adjustments, if applicable.
Multiple Classes of Shares of Beneficial Interest — The fund offers multiple classes of shares, which differ in their respective distribution and service fees. The fund's income, realized and unrealized gain (loss), and common expenses are allocated to
shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class C shares will convert
to Class A shares approximately eight years after purchase. The fund’s distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||
| Class A | $100,252,466 | $94,477,039 | |
| Class B | 2,307,344 | 2,887,495 | |
| Class C | 7,037,774 | 10,265,504 | |
| Class I | 37,106,485 | 35,337,329 | |
| Class R1 | 248,669 | 240,493 | |
| Class R2 | 2,113,179 | 2,050,092 | |
| Class R3 | 10,308,762 | 10,618,983 | |
| Class R4 | 1,357,197 | 1,386,227 | |
| Class R6 | 4,344,085 | 4,366,952 | |
| Total | $165,075,961 | $161,630,114 |
(3) Transactions with
Affiliates
Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The
management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:
| Up to $3 billion | 0.60% |
| In excess of $3 billion and up to $10 billion | 0.55% |
| In excess of $10 billion | 0.50% |
28
Notes to Financial
Statements (unaudited) - continued
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 of Trustees. Effective March 1, 2022, MFS has also 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 of Trustees, but such agreement will continue at least until February 29, 2024. For the six months ended April 30, 2022, this management fee
reduction amounted to $222,981, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective rate of 0.58% of the
fund's average daily net assets.
Distributor — MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $94,283 for the six months ended April 30, 2022, as its portion of the initial sales charge on sales of Class A
shares of the fund.
The Board of Trustees has
adopted a distribution plan for certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund's distribution plan provides that the fund will pay
MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee
paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| Distribution
Fee Rate (d) |
Service
Fee Rate (d) |
Total
Distribution Plan (d) |
Annual
Effective Rate (e) |
Distribution
and Service Fee | |
| Class A | — | 0.25% | 0.25% | 0.25% | $ 2,427,805 |
| Class B | 0.75% | 0.25% | 1.00% | 1.00% | 229,247 |
| Class C | 0.75% | 0.25% | 1.00% | 1.00% | 702,197 |
| Class R1 | 0.75% | 0.25% | 1.00% | 1.00% | 24,972 |
| Class R2 | 0.25% | 0.25% | 0.50% | 0.50% | 102,894 |
| Class R3 | — | 0.25% | 0.25% | 0.25% | 254,856 |
| Total Distribution and Service Fees | $3,741,971 |
| (d) | In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the six months ended April 30, 2022 based on each class's average daily net assets. MFD has voluntarily agreed to rebate a portion of each class's 0.25% service fee attributable to accounts for which there is no financial intermediary specified on the account except for accounts attributable to MFS or its affiliates' seed money. For the six months ended April 30, 2022, this rebate amounted to $394, $5, $29, $3, and $11 for Class A, Class B, Class R1, Class R2, and Class R3, respectively, and is included in the reduction of total expenses in the Statement of Operations. |
29
Notes to Financial
Statements (unaudited) - continued
Certain Class A shares are subject to a contingent deferred
sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. Class C shares are subject to a CDSC in the event
of a shareholder redemption within 12 months of purchase. All contingent deferred sales charges are paid to MFD and during the six months ended April 30, 2022, were as follows:
| Amount | |
| Class A | $20,435 |
| Class B | 9,306 |
| Class C | 3,237 |
Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of the
fund as determined periodically under the supervision of the fund's Board of Trustees. For the six months ended April 30, 2022, the fee was $266,047, which equated to 0.0167% annually of the fund's average daily net assets. MFSC also receives
reimbursement from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. Class R6 shares do not incur sub-accounting fees. For the six months
ended April 30, 2022, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $1,486,104.
Administrator — MFS
provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is
charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the six months ended April 30, 2022 was equivalent to an annual effective rate of 0.0143% of the fund's average
daily net assets.
Trustees’ and
Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not
pay compensation directly to Trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration from MFS for their services to the fund. Certain officers and Trustees of the fund are officers or
directors of MFS, MFD, and MFSC.
Other — The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. This money market fund does not pay a
management fee to MFS but does incur investment and operating costs.
The adviser has voluntarily undertaken to reimburse the fund
from its own resources on a quarterly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the six months ended April 30, 2022, this reimbursement
amounted to $88,363, which is included in “Other” income in the Statement of Operations.
30
Notes to Financial
Statements (unaudited) - continued
(4) Portfolio Securities
For the six months ended April 30, 2022, purchases and sales of
investments, other than short-term obligations, aggregated $475,053,780 and $508,368,612, respectively.
(5) Shares of Beneficial Interest
The fund's Declaration of Trust permits the Trustees to issue
an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Shares sold | |||||
| Class A | 3,606,854 | $87,426,810 | 7,874,900 | $180,815,780 | |
| Class B | 12,806 | 314,149 | 14,845 | 335,287 | |
| Class C | 245,473 | 5,951,709 | 513,953 | 11,949,650 | |
| Class I | 3,161,715 | 77,212,168 | 4,844,245 | 112,942,915 | |
| Class R1 | 25,361 | 607,452 | 44,031 | 1,017,001 | |
| Class R2 | 329,988 | 7,864,334 | 348,948 | 8,065,585 | |
| Class R3 | 1,049,716 | 25,624,091 | 915,406 | 21,468,572 | |
| Class R4 | 208,268 | 5,063,004 | 212,326 | 4,877,568 | |
| Class R6 | 704,912 | 17,271,620 | 1,163,315 | 27,227,539 | |
| 9,345,093 | $227,335,337 | 15,931,969 | $368,699,897 | ||
| Shares
issued to shareholders in reinvestment of distributions |
|||||
| Class A | 3,932,170 | $94,399,310 | 3,919,494 | $88,691,610 | |
| Class B | 89,684 | 2,141,212 | 116,278 | 2,605,823 | |
| Class C | 289,121 | 6,902,836 | 451,868 | 10,123,119 | |
| Class I | 1,374,016 | 33,142,290 | 1,373,518 | 31,251,843 | |
| Class R1 | 10,450 | 248,669 | 10,756 | 240,493 | |
| Class R2 | 88,151 | 2,108,812 | 90,390 | 2,036,094 | |
| Class R3 | 429,745 | 10,308,762 | 469,846 | 10,618,947 | |
| Class R4 | 50,475 | 1,213,052 | 55,445 | 1,256,825 | |
| Class R6 | 145,723 | 3,516,764 | 131,172 | 2,987,409 | |
| 6,409,535 | $153,981,707 | 6,618,767 | $149,812,163 | ||
31
Notes to Financial
Statements (unaudited) - continued
| Six
months ended 4/30/22 |
Year
ended 10/31/21 | ||||
| Shares | Amount | Shares | Amount | ||
| Shares reacquired | |||||
| Class A | (5,950,810) | $(143,646,720) | (12,553,103) | $(292,087,220) | |
| Class B | (412,490) | (9,890,525) | (1,037,361) | (23,985,070) | |
| Class C | (1,228,304) | (29,337,757) | (5,513,991) | (124,958,158) | |
| Class I | (2,622,039) | (63,691,606) | (7,059,825) | (164,223,053) | |
| Class R1 | (41,017) | (984,135) | (83,982) | (1,929,069) | |
| Class R2 | (490,734) | (11,613,467) | (617,443) | (14,268,315) | |
| Class R3 | (796,970) | (19,365,748) | (2,472,316) | (57,585,546) | |
| Class R4 | (200,666) | (4,877,954) | (365,253) | (8,494,981) | |
| Class R6 | (388,071) | (9,437,559) | (1,533,100) | (35,638,393) | |
| (12,131,101) | $(292,845,471) | (31,236,374) | $(723,169,805) | ||
| Net change | |||||
| Class A | 1,588,214 | $38,179,400 | (758,709) | $(22,579,830) | |
| Class B | (310,000) | (7,435,164) | (906,238) | (21,043,960) | |
| Class C | (693,710) | (16,483,212) | (4,548,170) | (102,885,389) | |
| Class I | 1,913,692 | 46,662,852 | (842,062) | (20,028,295) | |
| Class R1 | (5,206) | (128,014) | (29,195) | (671,575) | |
| Class R2 | (72,595) | (1,640,321) | (178,105) | (4,166,636) | |
| Class R3 | 682,491 | 16,567,105 | (1,087,064) | (25,498,027) | |
| Class R4 | 58,077 | 1,398,102 | (97,482) | (2,360,588) | |
| Class R6 | 462,564 | 11,350,825 | (238,613) | (5,423,445) | |
| 3,623,527 | $88,471,573 | (8,685,638) | $(204,657,745) | ||
Effective June 1, 2019, purchases of
the fund’s Class B shares are closed to new and existing investors subject to certain exceptions. Please see the fund’s prospectus for details.
(6) Line of Credit
The fund and certain other funds managed by MFS participate in
a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for
temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of Daily Simple SOFR plus 0.10%, the Federal Funds Effective Rate, and the Overnight Bank Funding Rate, plus an agreed
upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds. In addition, the fund and other funds managed by MFS have established unsecured uncommitted
borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its
32
Notes to Financial
Statements (unaudited) - continued
borrowings, at rates equal to customary reference rates plus an agreed upon
spread. For the six months ended April 30, 2022, the fund’s commitment fee and interest expense were $5,957 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.
(7) Investments in 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 following were affiliated issuers:
| Affiliated Issuers | Beginning
Value |
Purchases | Sales
Proceeds |
Realized
Gain (Loss) |
Change
in Unrealized Appreciation or Depreciation |
Ending
Value |
| MFS Institutional Money Market Portfolio | $21,815,025 | $196,730,212 | $173,336,129 | $— | $— | $45,209,108 |
| Affiliated Issuers | Dividend
Income |
Capital
Gain Distributions |
| MFS Institutional Money Market Portfolio | $18,837 | $— |
(8) LIBOR Transition
Certain of the fund's investments, including investments in
certain debt instruments and derivatives (if any), as well as borrowings by the fund and certain other contractual arrangements of the fund, may be based on the London Interbank Offered Rate (“LIBOR”). In 2017, the regulatory authority
that oversees financial services firms in the United Kingdom announced plans to transition away from LIBOR by the end of 2021. In March 2021, the administrator of LIBOR announced the extension of the publication of the more commonly used U.S. dollar
LIBOR settings to the end of June 2023. Although the full impacts of the transition away from LIBOR are not fully known, the transition may result in, among other things, an increase in volatility or illiquidity of the markets for instruments that
currently rely on LIBOR to determine interest rates and this could have an adverse impact on the fund's performance. With respect to the fund's accounting for investments, including investments in certain debt instruments and derivatives, as well as
borrowings by the fund and any other contractual arrangements of the fund that undergo reference rate-related modifications as a result of the transition, management will rely upon the relief provided by FASB Codification Topic 848 – Reference
Rate Reform (Topic 848). The guidance in Topic 848 permits the fund to account for those modified contracts as a continuation of the existing contracts. Management is still evaluating the impact to the fund of the June 30, 2023 planned
discontinuation of the more commonly used U.S. dollar LIBOR settings.
(9) Russia and Ukraine Conflict
The market disruptions, which began in late February 2022,
associated with geopolitical events related to the conflict between Russia and Ukraine may adversely affect the value of the fund’s assets and thus the fund’s performance. Management continues to monitor these events and to evaluate the
related impacts, if any, to the fund.
33
Statement Regarding
Liquidity Risk Management Program
The fund has adopted
and implemented a liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The fund’s Board of Trustees (the “Board”) has designated MFS as the
administrator of the Program. The Program is reasonably designed to assess and manage the liquidity risk of the fund. Liquidity risk is the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution
of remaining investors' interests.
MFS provided a written
report to the Board for consideration at its March 2022 meeting that addressed the operation of the Program and provided an assessment of the adequacy and effectiveness of the Program during the period from January 1, 2021 to December 31, 2021 (the
“Covered Period”). The report concluded that during the Covered Period the Program had operated effectively in all material respects and had adequately and effectively been implemented to assess and manage the fund’s liquidity
risk. MFS also reported that there were no liquidity events that impacted the fund or its ability to timely meet redemptions without dilution to existing shareholders during the Covered Period.
There can be no assurance that the Program will achieve its
objectives in the future. Further information on liquidity risk, and other principal risks to which an investment in the fund may be subject, can be found in the prospectus.
34
Proxy
Voting Policies and Information
MFS votes proxies on
behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s
Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to
portfolio securities during the most recent twelve-month period ended June 30 is available by August 31 of each year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure
The fund files a complete schedule of portfolio holdings with
the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. A
shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/openendfunds by choosing the fund's name and then scrolling to the
“Resources” section and clicking on the “Prospectus and Reports” tab.
Further Information
From time to time, MFS may post important information about the
fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at
mfs.com/openendfunds by choosing the fund’s name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.
Information About Fund Contracts and Legal Claims
The fund has entered into contractual arrangements with an
investment adviser, administrator, distributor, shareholder servicing agent, 529 program manager (if applicable), and custodian who each provide services to the fund. Unless expressly stated otherwise, shareholders 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.
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.
Provision of Financial Reports and
Summary Prospectuses
The fund produces financial reports
every six months and updates its summary prospectus and prospectus annually. To avoid sending duplicate copies of materials to households, only one copy of the fund’s annual and semiannual report and summary prospectus may be mailed to
shareholders having the same last name and residential address on the fund’s records. However, any shareholder may contact MFSC (please see back cover for address and telephone number) to request that copies of these reports and summary
prospectuses be sent personally to that shareholder.
35
Item 1(b):
Not applicable
| ITEM 2. | CODE OF ETHICS. |
During the period covered by this report, the Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable for semi-annual reports.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable for semi-annual reports.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable to the Registrant.
| ITEM 6. | INVESTMENTS |
A schedule of investments for each series of the Registrant is included as part of the report to shareholders of such series under Item 1(a) of this Form N-CSR.
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable to the Registrant.
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable to the Registrant.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable to the Registrant.
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.
| ITEM 11. | CONTROLS AND PROCEDURES. |
| (a) | Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. |
| (b) | There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by the report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| ITEM 12. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable to the Registrant.
| ITEM 13. | EXHIBITS. |
| (a) | File the exhibits listed below as part of this form. Letter or number the exhibits in the sequence indicated. |
| (1) | Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. Not applicable. |
| (2) | 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 as EX-99.302CERT. |
| (3) | Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. |
| (4) | Change in the registrant’s independent public accountant. Not applicable. |
| (b) | If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: Attached hereto as EX-99.906CERT. |
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 VI | ||
| By (Signature and Title)* | /S/ DAVID L. DILORENZO | |
| David L. DiLorenzo, President |
Date: June 15, 2022
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)* | /S/ DAVID L. DILORENZO | |
| David L. DiLorenzo, President (Principal Executive Officer) |
Date: June 15, 2022
| By (Signature and Title)* | /S/ JAMES O. YOST | |
| James O. Yost, Treasurer (Principal Financial Officer and Accounting Officer) |
Date: June 15, 2022
| * | Print name and title of each signing officer under his or her signature. |