N-CSRS 1 dncsrs.htm MFS SERIES TRUST XI MFS Series Trust XI

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 811-7992

 

 

 

 

 

 

 

MFS SERIES TRUST XI

(Exact name of registrant as specified in charter)

 

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

 

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

 

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

 

Date of fiscal year end: September 30

 

Date of reporting period: March 31, 2008


ITEM 1. REPORTS TO STOCKHOLDERS.


LOGO


MFS® Mid Cap Value Fund

 

LETTER FROM THE CEO      1
PORTFOLIO COMPOSITION      2
EXPENSE TABLE      3
PORTFOLIO OF INVESTMENTS      6
STATEMENT OF ASSETS AND LIABILITIES      12
STATEMENT OF OPERATIONS      15
STATEMENTS OF CHANGES IN NET ASSETS      16
FINANCIAL HIGHLIGHTS      17
NOTES TO FINANCIAL STATEMENTS      31
RESULTS OF SHAREHOLDER MEETING      42
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT      43
PROXY VOTING POLICIES AND INFORMATION      43
QUARTERLY PORTFOLIO DISCLOSURE      43
CONTACT INFORMATION BACK COVER

 

The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

 

NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ

NO BANK OR CREDIT UNION GUARANTEE Ÿ NOT A DEPOSIT Ÿ

NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR

NCUA/NCUSIF

 

3/31/08

MDV-SEM


LOGO

 

LETTER FROM THE CEO

Dear Shareholders:

Many of our MFS® fund shareholders have been justifiably concerned, as have most investors around the world, about the state of the global economy. As we enter 2008 we see the market volatility that began in the third quarter of 2007 has intensified.

We here at MFS, and those before us who guided the firm with the same disciplined investment process, have weathered many major economic disruptions over our eight-plus decades of managing clients’ investments. We have managed money through the Great Depression, 14 recessions, as well as numerous market crises caused by wars, political upheavals, and terrorist attacks. MFS remains in business because our investors believe in the integrity of our long-term investment strategy and its proven results.

Worries over market volatility are valid, and investors cannot always expect to see the kind of returns stocks have delivered in the bull markets of past years. Yet we believe our strategy of ADR allocating across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain your desired allocation — can help you pursue the highest investment returns while minimizing the effects of market fluctuations.

MFS is a world leader in domestic and global investing. Our team approach is research driven, globally integrated, and balanced. We have 176 investment management professionals located in the Americas, Europe, and Asia who focus on the fundamentals of each security and then integrate our sophisticated quantitative approach.* This collaborative process allows us to find opportunities in any market environment.

I personally would like to thank you for your continued business. We want you to be confident that we are constantly managing our fund offerings with you in mind, while adding new products that can help you to choose what fits your unique financial goals.

Respectfully,

LOGO

Robert J. Manning

Chief Executive Officer and Chief Investment Officer

MFS Investment Management®

May 15, 2008

* as of 12/31/07

The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.

 

1


PORTFOLIO COMPOSITION

 

LOGO

 

Top ten holdings  
Hess Corp.   4.3%
Eaton Corp.   3.0%
El Paso Corp.   2.9%
Equity Residential, REIT   2.6%
Timken Co.   2.5%
Questar Corp.   2.5%
NRG Energy, Inc.   2.4%
QLogic Corp.   2.3%
Williams Cos., Inc.   2.2%
NVR, Inc.   2.2%

 

Equity sectors  
Financial Services   22.5%
Utilities & Communications   20.6%
Industrial Goods & Services   11.2%
Technology   7.2%
Autos & Housing   6.1%
Health Care   6.0%
Basic Materials   5.6%
Leisure   5.5%
Retailing   5.0%
Consumer Staples   4.4%
Energy   4.3%
Special Products & Services   1.1%

 

Percentages are based on net assets as of 3/31/08.

The portfolio is actively managed and current holdings may be different.

 

2


 

EXPENSE TABLE

Fund expenses borne by the shareholders during the period, October 1, 2007 through March 31, 2008

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 October 1, 2007 through March 31, 2008.

The expenses include the payment of a portion of the transfer-agent-related expenses of MFS funds that invest in the fund. For further information, please see the Notes to the Financial Statements.

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
10/01/07
  Ending
Account Value
3/31/08
  Expenses
Paid During
Period (p)
10/01/07-3/31/08
A   Actual   1.30%   $1,000.00   $855.58   $6.03
  Hypothetical (h)   1.30%   $1,000.00   $1,018.50   $6.56
B   Actual   1.95%   $1,000.00   $853.41   $9.04
  Hypothetical (h)   1.95%   $1,000.00   $1,015.25   $9.82
C   Actual   1.95%   $1,000.00   $853.73   $9.04
  Hypothetical (h)   1.95%   $1,000.00   $1,015.25   $9.82
I   Actual   0.96%   $1,000.00   $857.48   $4.46
  Hypothetical (h)   0.96%   $1,000.00   $1,020.20   $4.85
R   Actual   1.43%   $1,000.00   $855.05   $6.63
  Hypothetical (h)   1.43%   $1,000.00   $1,017.85   $7.21
R1   Actual   2.05%   $1,000.00   $852.91   $9.50
  Hypothetical (h)   2.05%   $1,000.00   $1,014.75   $10.33
R2   Actual   1.59%   $1,000.00   $854.58   $7.37
  Hypothetical (h)   1.59%   $1,000.00   $1,017.05   $8.02
R3   Actual   1.54%   $1,000.00   $854.98   $7.14
  Hypothetical (h)   1.54%   $1,000.00   $1,017.30   $7.77
R4   Actual   1.28%   $1,000.00   $856.33   $5.94
  Hypothetical (h)   1.28%   $1,000.00   $1,018.60   $6.46
R5   Actual   1.01%   $1,000.00   $857.10   $4.69
  Hypothetical (h)   1.01%   $1,000.00   $1,019.95   $5.10
529A   Actual   1.56%   $1,000.00   $854.92   $7.23
  Hypothetical (h)   1.56%   $1,000.00   $1,017.20   $7.87
529B   Actual   2.21%   $1,000.00   $851.79   $10.23
  Hypothetical (h)   2.21%   $1,000.00   $1,013.95   $11.13
529C   Actual   2.21%   $1,000.00   $852.06   $10.23
  Hypothetical (h)   2.21%   $1,000.00   $1,013.95   $11.13

 

(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

Effective January 1, 2008, the fund’s Class R2, Class R3, Class R4, and Class R5 retirement plan administration and service fee was terminated (as described in Note 3 of the Notes to the Financial Statements). Had this fee change been in effect throughout the entire six month period, the annualized expense ratios would have been 1.46%, 1.46%, 1.22% and 0.96% for Class R2, Class R3, Class R4 and

 

4


Expense Table – continued

 

Class R5 shares respectively. The actual expenses paid during the period would have been approximately $6.79, $6.79, $5.68, and $4.47 and the hypothetical expenses paid during the period would have been approximately $7.38, $7.38, $6.17 and $4.86 for Class R2, Class R3, Class R4 and Class R5 shares, respectively.

Effective March 1, 2008, the fund’s Class R1 retirement plan administration and service fee was terminated and the Class R1 distribution fee was increased (as described in Note 3 of the Notes to the Financial Statements). Had these fee changes been in effect throughout the entire six month period, the annualized expense ratio would have been 1.96%. The actual expenses paid during the period would have been approximately $9.11 and the hypothetical expenses paid during the period would have been approximately $9.90.

Effective April 1, 2008, the fund’s Class 529A, 529B, and 529C shares program manager fee was reduced (as described in Note 3 of the Notes to Financial Statements). Had this fee change been in effect throughout the entire six month period, the annualized expense ratio would have been 1.41%, 2.06% and 2.06% for Class 529A, 529B and 529C shares, respectively. The actual expenses paid during the period would have been approximately $6.56, $9.57 and $9.57 and the hypothetical expenses paid during the period would have been approximately $7.13, $10.40 and $10.40 for Class 529A, Class 529B and Class 529C shares, respectively.

 

 

Note to Shareholders: On April 18, 2008, Class R shares and Class R2 shares were converted into Class R3 shares. After the conversion, Class R3, Class R4, and Class R5 were renamed Class R2, Class R3, and Class R4, respectively.

 

5


 

PORTFOLIO OF INVESTMENTS

3/31/08 (unaudited)

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Common Stocks - 99.5%           
Issuer    Shares/Par   Value ($)
    
Apparel Manufacturers - 0.8%           
Coach, Inc. (a)    213,940   $ 6,450,291
Automotive - 1.6%           
Autoliv, Inc.    185,100   $ 9,292,020
Goodyear Tire & Rubber Co. (a)    133,910     3,454,878
        
         $ 12,746,898
Biotechnology - 1.5%           
Invitrogen Corp. (a)    145,150   $ 12,405,970
Brokerage & Asset Managers - 0.2%           
TD AMERITRADE Holding Corp. (a)    114,400   $ 1,888,744
Business Services - 1.1%           
Fidelity National Information Services, Inc.    75,490   $ 2,879,189
Western Union Co.    291,610     6,202,545
        
         $ 9,081,734
Cable TV - 0.4%           
Liberty Global, Inc., “A” (a)    92,220   $ 3,142,858
Chemicals - 2.1%           
PPG Industries, Inc.    284,070   $ 17,189,076
Computer Software - 2.1%           
McAfee, Inc. (a)    286,430   $ 9,477,969
Parametric Technology Corp. (a)    277,210     4,429,816
Synopsys, Inc. (a)    134,390     3,051,997
        
         $ 16,959,782
Computer Software - Systems - 0.2%           
Network Appliance, Inc. (a)    77,400   $ 1,551,870
Construction - 3.5%           
Masco Corp.    400,380   $ 7,939,535
NVR, Inc. (a)    29,600     17,686,000
Sherwin-Williams Co.    62,240     3,176,730
        
         $ 28,802,265

 

6


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks - continued           
Electrical Equipment - 1.9%           
Rockwell Automation, Inc.    150,840   $ 8,661,233
WESCO International, Inc. (a)    174,430     6,364,951
        
         $ 15,026,184
Electronics - 2.0%           
Intersil Corp., “A”    451,570   $ 11,591,802
National Semiconductor Corp.    118,690     2,174,401
SanDisk Corp. (a)    118,610     2,677,028
        
         $ 16,443,231
Energy - Integrated - 4.3%           
Hess Corp.    397,370   $ 35,040,087
Engineering - Construction - 0.7%           
Shaw Group, Inc. (a)    113,660   $ 5,357,932
Entertainment - 0.4%           
Regal Entertainment Group, “A”    160,240   $ 3,091,030
Food & Beverages - 2.4%           
Coca-Cola Enterprises, Inc.    81,680   $ 1,976,656
Dean Foods Co.    133,170     2,675,385
Pepsi Bottling Group, Inc.    449,340     15,237,119
        
         $ 19,889,160
Food & Drug Stores - 1.8%           
Kroger Co.    361,670   $ 9,186,418
Longs Drug Stores Corp.    125,330     5,321,512
        
         $ 14,507,930
Furniture & Appliances - 1.0%           
Tupperware Brands Corp.    213,740   $ 8,267,463
Gaming & Lodging - 1.7%           
Royal Caribbean Cruises Ltd.    416,870   $ 13,715,023
General Merchandise - 1.1%           
Macy’s, Inc.    377,560   $ 8,706,534
Health Maintenance Organizations - 1.5%           
AMERIGROUP Corp. (a)    141,220   $ 3,859,543
CIGNA Corp.    197,050     7,994,319
        
         $ 11,853,862

 

7


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks - continued           
Insurance - 11.0%           
Ace Ltd.    55,970   $ 3,081,708
Allied World Assurance Co. Holdings Ltd.    147,800     5,867,660
Aspen Insurance Holdings Ltd.    568,780     15,004,416
Employers Holdings, Inc.    50,740     940,720
Endurance Specialty Holdings Ltd.    415,090     15,192,294
Genworth Financial, Inc., “A”    757,680     17,153,875
IPC Holdings Ltd.    76,870     2,152,360
Max Capital Group Ltd.    162,100     4,245,399
PartnerRe Ltd.    79,030     6,029,989
Protective Life Corp.    159,790     6,481,082
RenaissanceRe Holdings Ltd.    46,920     2,435,617
W.R. Berkley Corp.    211,980     5,869,726
XL Capital Ltd., “A”    80,960     2,392,368
Zenith National Insurance Corp.    76,360     2,738,270
        
         $ 89,585,484
Leisure & Toys - 0.9%           
Hasbro, Inc.    180,400   $ 5,033,160
Scientific Games Corp. (a)    112,140     2,367,275
        
         $ 7,400,435
Machinery & Tools - 7.4%           
Eaton Corp.    303,590   $ 24,187,015
Ingersoll-Rand Co. Ltd., “A”    97,040     4,326,043
Kennametal, Inc.    169,010     4,973,964
Timken Co.    691,021     20,537,144
Trinity Industries, Inc.    235,170     6,267,280
        
         $ 60,291,446
Major Banks - 1.6%           
Bank of New York Mellon Corp.    95,230   $ 3,973,948
PNC Financial Services Group, Inc.    99,690     6,536,673
UnionBanCal Corp.    54,300     2,665,044
        
         $ 13,175,665
Medical & Health Technology & Services - 0.9%           
AmerisourceBergen Corp.    144,010   $ 5,901,530
HealthSouth Corp. (a)    90,610     1,611,952
        
         $ 7,513,482
Medical Equipment - 1.3%           
Advanced Medical Optics, Inc. (a)    58,540   $ 1,188,362

 

8


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks - continued           
Medical Equipment - continued           
Cooper Cos., Inc.    264,460   $ 9,105,358
        
         $ 10,293,720
Metals & Mining - 2.8%           
Allegheny Technologies, Inc.    80,120   $ 5,717,363
Freeport-McMoRan Copper & Gold, Inc.    94,550     9,097,601
Olin Corp.    94,650     1,870,284
United States Steel Corp.    49,700     6,305,439
        
         $ 22,990,687
Natural Gas - Distribution - 3.5%           
Energen Corp.    134,100   $ 8,354,430
Questar Corp.    353,830     20,012,625
        
         $ 28,367,055
Natural Gas - Pipeline - 5.1%           
El Paso Corp.    1,401,250   $ 23,316,800
Williams Cos., Inc.    544,060     17,943,099
        
         $ 41,259,899
Network & Telecom - 2.3%           
QLogic Corp. (a)    1,227,590   $ 18,843,506
Other Banks & Diversified Financials - 3.7%           
American Capital Strategies Ltd.    119,800   $ 4,092,368
AmeriCredit Corp. (a)    207,490     2,089,424
East West Bancorp, Inc.    275,260     4,885,865
Marshall & Ilsley Corp.    77,150     1,789,880
New York Community Bancorp, Inc.    543,450     9,901,659
Northern Trust Corp.    91,010     6,049,435
TCF Financial Corp.    86,100     1,542,912
        
         $ 30,351,543
Personal Computers & Peripherals - 0.6%           
Western Digital Corp. (a)    177,650   $ 4,803,656
Pharmaceuticals - 0.8%           
Medicis Pharmaceutical Corp., “A”    313,820   $ 6,179,116
Pollution Control - 1.2%           
Allied Waste Industries, Inc. (a)    926,430   $ 10,014,708

 

9


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks - continued           
Printing & Publishing - 0.5%           
Washington Post Co., “B”    5,840   $ 3,863,160
Real Estate - 6.0%           
BRE Properties, Inc., REIT    103,970   $ 4,736,873
CBL & Associates Properties, Inc., REIT    78,730     1,852,517
Equity Residential, REIT    503,000     20,869,470
Host Hotels & Resorts, Inc., REIT    552,780     8,800,258
Mack-Cali Realty Corp., REIT    193,350     6,904,528
Maguire Properties, Inc., REIT    113,400     1,622,754
Taubman Centers, Inc., REIT    82,260     4,285,746
        
         $ 49,072,146
Restaurants - 1.6%           
Darden Restaurants, Inc.    405,810   $ 13,209,116
Specialty Chemicals - 0.7%           
Air Products & Chemicals, Inc.    62,560   $ 5,755,520
Specialty Stores - 1.3%           
Advance Auto Parts, Inc.    228,230   $ 7,771,231
RadioShack Corp.    195,690     3,179,962
        
         $ 10,951,193
Telephone Services - 3.0%           
Embarq Corp.    414,140   $ 16,607,014
Qwest Communications International, Inc.    1,750,980     7,931,939
        
         $ 24,538,953
Tobacco - 2.0%           
Loews Corp.    199,960   $ 14,507,098
Reynolds American, Inc.    36,200     2,136,886
        
         $ 16,643,984
Utilities - Electric Power - 9.0%           
American Electric Power Co., Inc.    83,610   $ 3,480,684
CMS Energy Corp.    106,840     1,446,614
Constellation Energy Group, Inc.    94,811     8,368,967
Edison International    45,570     2,233,841
FPL Group, Inc.    91,740     5,755,768
NRG Energy, Inc. (a)    502,830     19,605,342
Pepco Holdings, Inc.    647,920     16,016,582
PG&E Corp.    434,280     15,990,190
        
         $ 72,897,988
Total Common Stocks (Identified Cost, $840,315,743)        $ 810,120,386

 

10


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Short-Term Obligations - 0.4%             
Natexis Banques Populaires U.S. Financial Co. LLC,
2.84%, due 4/01/08, at Amortized Cost and Value (y)
   $ 3,223,000   $ 3,223,000
Total Investments (Identified Cost, $843,538,743)          $ 813,343,386
Other Assets, Less Liabilities - 0.1%            1,094,874
Net Assets - 100.0%          $ 814,438,260

 

(a) Non-income producing security.
(y) The rate shown represents an annualized yield at time of purchase.

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

 

REIT   Real Estate Investment Trust

See Notes to Financial Statements

 

11


Financial Statements

 

STATEMENT OF ASSETS AND LIABILITIES

At 3/31/08 (unaudited)

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

 

Assets            
Investments, at value (identified cost, $843,538,743)    $813,343,386     
Cash    587     
Receivable for investments sold    35,809,096     
Receivable for fund shares sold    1,190,499     
Dividends receivable    1,215,835     
Other assets    10,519       
Total assets           $851,569,922
Liabilities            
Payable for investments purchased    $35,914,342     
Payable for fund shares reacquired    734,526     
Payable to affiliates      

Management fee

   66,605     

Shareholder servicing costs

   227,259     

Distribution and service fees

   15,955     

Administrative services fee

   1,200     

Program manager fees

   38     
Payable for independent trustees’ compensation    1,476     
Accrued expenses and other liabilities    170,261       
Total liabilities           $37,131,662
Net assets           $814,438,260
Net assets consist of:            
Paid-in capital    $875,510,137     
Unrealized appreciation (depreciation) on investments    (30,195,357 )   
Accumulated net realized gain (loss) on investments    (33,042,275 )   
Undistributed net investment income    2,165,755       
Net assets           $814,438,260
Shares of beneficial interest outstanding           68,791,262

 

12


Statement of Assets and Liabilities (unaudited) – continued

 

Class A shares          

Net assets

   $175,669,687   

Shares outstanding

   14,970,535     

Net asset value per share

        $11.73

Offering price per share (100 / 94.25 × net asset value per share)

        $12.45
Class B shares          

Net assets

   $48,005,990   

Shares outstanding

   4,240,469     

Net asset value and offering price per share

        $11.32
Class C shares          

Net assets

   $27,195,018   

Shares outstanding

   2,401,306     

Net asset value and offering price per share

        $11.33
Class I shares          

Net assets

   $545,937,573   

Shares outstanding

   45,636,171     

Net asset value, offering price, and redemption price per share

        $11.96
Class R shares          

Net assets

   $848,557   

Shares outstanding

   72,084     

Net asset value, offering price, and redemption price per share

        $11.77
Class R1 shares          

Net assets

   $1,711,886   

Shares outstanding

   152,469     

Net asset value, offering price, and redemption price per share

        $11.23
Class R2 shares          

Net assets

   $7,894,506   

Shares outstanding

   697,945     

Net asset value, offering price, and redemption price per share

        $11.31
Class R3 shares          

Net assets

   $4,107,240   

Shares outstanding

   355,287     

Net asset value, offering price, and redemption price per share

        $11.56
Class R4 shares          

Net assets

   $1,607,511   

Shares outstanding

   137,144     

Net asset value, offering price, and redemption price per share

        $11.72

 

13


Statement of Assets and Liabilities (unaudited) – continued

 

Class R5 shares          

Net assets

   $56,745   

Shares outstanding

   4,815     

Net asset value, offering price, and redemption price per share

        $11.78
Class 529A shares          

Net assets

   $847,341   

Shares outstanding

   73,072     

Net asset value per share

        $11.60

Offering price per share (100 / 94.25 × net asset value per share)

        $12.31
Class 529B shares          

Net assets

   $233,909   

Shares outstanding

   21,045     

Net asset value and offering price per share

        $11.11
Class 529C shares          

Net assets

   $322,297   

Shares outstanding

   28,920     

Net asset value and offering price per share

        $11.14

On sales of $50,000 or more, the offering prices of Class A and Class 529A shares are reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C, Class 529B, and Class 529C shares.

Shares outstanding are rounded for presentation purposes.

See Notes to Financial Statements

 

14


Financial Statements

 

STATEMENT OF OPERATIONS

Six months ended 3/31/08 (unaudited)

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

 

Net investment income              
Income      

Dividends

   $8,859,798     

Interest

   447,204         
Total investment income           $9,307,002  
Expenses      

Management fee

   $3,355,922     

Distribution and service fees

   865,987     

Program manager fees

   1,974     

Shareholder servicing costs

   591,764     

Administrative services fee

   65,433     

Retirement plan administration and services fees

   9,551     

Independent trustees’ compensation

   8,906     

Custodian fee

   81,521     

Shareholder communications

   53,429     

Auditing fees

   14,740     

Legal fees

   5,611     

Miscellaneous

   96,909         
Total expenses           $5,151,747  

Fees paid indirectly

   (54 )   

Reduction of expenses by investment adviser

   (2,036 )       
Net expenses           $5,149,657  
Net investment income           $4,157,345  
Realized and unrealized gain (loss) on investments              
Net realized gain (loss) on investment transactions
(identified cost basis)
          $(19,638,744 )
Net change in unrealized appreciation (depreciation)
on investments
          $(125,060,107 )
Net realized and unrealized gain (loss) on investments           $(144,698,851 )
Change in net assets from operations           $(140,541,506 )

See Notes to Financial Statements

 

15


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
3/31/08
     Year ended
9/30/07
 
Change in net assets    (unaudited)         
From operations              
Net investment income    $4,157,345      $8,589,941  
Net realized gain (loss) on investments    (19,638,744 )    72,543,441  
Net unrealized gain (loss) on investments    (125,060,107 )    45,848,735  
Change in net assets from operations    $(140,541,506 )    $126,982,117  
Distributions declared to shareholders              
From net investment income      

Class A

   $(1,834,704 )    $(549,261 )

Class C

   (8,477 )     

Class I

   (6,930,188 )    (3,907,377 )

Class R

        (11,988 )

Class R1

   (7,176 )     

Class R2

   (46,357 )    (21,883 )

Class R3

   (33,600 )    (4,692 )

Class R4

   (13,330 )    (6,706 )

Class R5

   (669 )    (392 )

Class 529A

   (5,508 )    (65 )
From net realized gain on investments      

Class A

   (17,666,240 )    (4,107,567 )

Class B

   (5,521,190 )    (2,545,421 )

Class C

   (3,078,198 )    (1,193,455 )

Class I

   (50,382,710 )    (14,774,288 )

Class R

   (108,302 )    (180,871 )

Class R1

   (140,107 )    (25,855 )

Class R2

   (760,266 )    (174,770 )

Class R3

   (419,458 )    (74,629 )

Class R4

   (144,200 )    (37,405 )

Class R5

   (5,341 )    (1,700 )

Class 529A

   (83,369 )    (25,841 )

Class 529B

   (25,265 )    (6,853 )

Class 529C

   (34,695 )    (12,175 )
Total distributions declared to shareholders    $(87,249,350 )    $(27,663,194 )
Change in net assets from fund share transactions    $148,313,130      $2,819,718  
Total change in net assets    $(79,477,726 )    $102,138,641  
Net assets              
At beginning of period    893,915,986      791,777,345  
At end of period (including undistributed net investment income of $2,165,755 and $6,888,419, respectively)    $814,438,260      $893,915,986  

See Notes to Financial Statements

 

16


Financial Statements

 

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the fund’s financial performance for the semiannual period and the past 5 fiscal years (or life of a particular share class, if shorter). Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30
Class A     2007     2006     2005     2004     2003
                               
Net asset value, beginning of period   $15.15     $13.47     $14.45     $13.13     $10.72     $8.56
Income (loss) from investment operations                                  

Net investment income (loss) (d)

  $0.05     $0.13     $0.05     $(0.01 )   $(0.02 )   $0.01

Net realized and unrealized gain (loss) on investments and foreign currency

  (2.11 )   2.00     0.56     2.56     2.43     2.15
Total from investment operations   $(2.06 )   $2.13     $0.61     $2.55     $2.41     $2.16
Less distributions declared to shareholders                                  

From net investment income

  $(0.13 )   $(0.05 )   $—     $—     $—     $—

From net realized gain on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )      
Total distributions declared to shareholders   $(1.36 )   $(0.45 )   $(1.59 )   $(1.23 )   $—     $—
Net asset value, end of period   $11.73     $15.15     $13.47     $14.45     $13.13     $10.72
Total return (%) (r)(s)(t)   (14.44 )(n)   16.12     4.41     20.11     22.48     25.23
Ratios (%) (to average net assets) and Supplemental data:                                  
Expenses before expense reductions (f)   1.31 (a)   1.29     1.34     1.36     1.36     1.50
Expenses after expense reductions (f)   1.30 (a)   1.29     1.34     1.35     1.34     1.34
Net investment income (loss)   0.77 (a)   0.85     0.34     (0.07 )   (0.17 )   0.10
Portfolio turnover   35     56     122     126     128     158
Net assets at end of period (000 Omitted)   $175,670     $148,571     $146,373     $142,972     $83,631     $47,603

See Notes to Financial Statements

 

17


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class B     2007     2006     2005     2004     2003  
                                 
Net asset value, beginning of period   $14.57     $13.01     $14.10     $12.91     $10.61     $8.53  
Income (loss) from investment operations                                    

Net investment income (loss) (d)

  $0.01     $0.03     $(0.04 )   $(0.10 )   $(0.10 )   $(0.05 )

Net realized and unrealized gain
(loss) on investments and foreign currency

  (2.03 )   1.93     0.54     2.52     2.40     2.13  
Total from investment operations   $(2.02 )   $1.96     $0.50     $2.42     $2.30     $2.08  
Less distributions declared to shareholders                                    

From net realized gain
on investments

  $(1.23 )   $(0.40 )   $(1.59 )   $(1.23 )   $—     $—  
Net asset value, end of period   $11.32     $14.57     $13.01     $14.10     $12.91     $10.61  
Total return (%) (r)(s)(t)   (14.66 )(n)   15.31     3.68     19.40     21.68     24.38  
Ratios (%) (to average net assets) and Supplemental data:                                    
Expenses before expense reductions (f)   1.95 (a)   1.94     1.99     2.01     2.01     2.14  
Expenses after expense reductions (f)   1.95 (a)   1.94     1.99     2.00     1.99     1.99  
Net investment income (loss)   0.11 (a)   0.20     (0.33 )   (0.73 )   (0.82 )   (0.54 )
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period
(000 Omitted)
  $48,006     $72,726     $88,922     $113,672     $88,348     $65,799  

See Notes to Financial Statements

 

18


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class C     2007     2006     2005     2004     2003  
                                 
Net asset value, beginning of period   $14.58     $13.01     $14.10     $12.92     $10.61     $8.53  
Income (loss) from investment operations                                    

Net investment income (loss) (d)

  $0.01     $0.03     $(0.04 )   $(0.10 )   $(0.10 )   $(0.05 )

Net realized and unrealized gain
(loss) on investments and
foreign currency

  (2.03 )   1.94     0.54     2.51     2.41     2.13  
Total from investment operations   $(2.02 )   $1.97     $0.50     $2.41     $2.31     $2.08  
Less distributions declared to shareholders                                    

From net investment income

  $(0.00 )(w)   $—     $—     $—     $—     $—  

From net realized gain
on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )        
Total distributions declared to shareholders   $(1.23 )   $(0.40 )   $(1.59 )   $(1.23 )   $—     $—  
Net asset value, end of period   $11.33     $14.58     $13.01     $14.10     $12.92     $10.61  
Total return (%) (r)(s)(t)   (14.63 )(n)   15.38     3.68     19.30     21.77     24.38  
Ratios (%) (to average net assets) and Supplemental data:                                    
Expenses before expense reductions (f)   1.95 (a)   1.94     1.99     2.01     2.01     2.14  
Expenses after expense reductions (f)   1.95 (a)   1.94     1.99     2.00     1.99     1.99  
Net investment income (loss)   0.11 (a)   0.20     (0.31 )   (0.72 )   (0.82 )   (0.54 )
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period
(000 Omitted)
  $27,195     $41,066     $39,939     $42,162     $25,482     $16,369  

See Notes to Financial Statements

 

19


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30
Class I     2007     2006     2005     2004     2003
                               
Net asset value, beginning of period   $15.43     $13.72     $14.65     $13.25     $10.80     $8.59
Income (loss) from investment operations                                  

Net investment income (d)

  $0.08     $0.18     $0.10     $0.04     $0.02     $0.04

Net realized and unrealized gain (loss) on investments and foreign currency

  (2.15 )   2.04     0.56     2.59     2.45     2.17
Total from investment operations   $(2.07 )   $2.22     $0.66     $2.63     $2.47     $2.21
Less distributions declared to shareholders                                  

From net investment income

  $(0.17 )   $(0.11 )   $—     $—     $—     $—

From net realized gain on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )   (0.02 )  
Total distributions declared to shareholders   $(1.40 )   $(0.51 )   $(1.59 )   $(1.23 )   $(0.02 )   $—
Net asset value, end of period   $11.96     $15.43     $13.72     $14.65     $13.25     $10.80
Total return (%) (r)(s)   (14.25 )(n)   16.47     4.72     20.56     22.93     25.58
Ratios (%) (to average net assets) and Supplemental data:                                  
Expenses before expense reductions (f)   0.96 (a)   0.94     0.99     1.01     1.01     1.16
Expenses after expense reductions (f)   0.96 (a)   0.94     0.99     1.00     0.99     1.00
Net investment income   1.13 (a)   1.21     0.72     0.28     0.18     0.43
Portfolio turnover   35     56     122     126     128     158
Net assets at end of period
(000 Omitted)
  $545,938     $610,121     $498,403     $386,860     $249,118     $93,944

See Notes to Financial Statements

 

20


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R     2007     2006     2005     2004     2003 (i)  
                                 
Net asset value, beginning of period   $15.07     $13.39     $14.40     $13.11     $10.72     $9.11  
Income (loss) from
investment operations
                                   

Net investment income (loss) (d)

  $0.03     $0.10     $0.02     $(0.02 )   $(0.04 )   $(0.00 )(w)

Net realized and unrealized gain
(loss) on investments and
foreign currency

  (2.10 )   2.01     0.56     2.54     2.44     1.61 (g)
Total from investment operations   $(2.07 )   $2.11     $0.58     $2.52     $2.40     $1.61  
Less distributions declared to shareholders                                    

From net investment income

  $—     $(0.03 )   $—     $—     $—     $—  

From net realized gain
on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )   (0.01 )    
Total distributions declared
to shareholders
  $(1.23 )   $(0.43 )   $(1.59 )   $(1.23 )   $(0.01 )   $—  
Net asset value, end of period   $11.77     $15.07     $13.39     $14.40     $13.11     $10.72  
Total return (%) (r)(s)   (14.50 )(n)   16.00     4.20     19.90     22.43     17.67 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                                   
Expenses before expense reductions (f)   1.43 (a)   1.44     1.49     1.52     1.52     1.65 (a)
Expenses after expense reductions (f)   1.43 (a)   1.44     1.49     1.51     1.50     1.49 (a)
Net investment income (loss)   0.51 (a)   0.69     0.16     (0.18 )   (0.30 )   (0.06 )(a)
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period
(000 Omitted)
  $849     $4,635     $6,829     $10,761     $1,941     $260  

See Notes to Financial Statements

 

21


Financial Highlights – continued

 

    

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R1      2007      2006      2005 (i)  
                        
Net asset value, beginning of period    $14.54     $12.99      $14.09      $13.03  
Income (loss) from
investment operations
                          

Net investment income (loss) (d)

   $0.01     $0.01      $(0.04 )    $(0.06 )

Net realized and unrealized gain
(loss) on investments and
foreign currency

   (2.03 )   1.94      0.53      1.12 (g)
Total from investment operations    $(2.02 )   $1.95      $0.49      $1.06  
Less distributions declared
to shareholders
                          

From net investment income

   $(0.06 )   $—      $—      $—  

From net realized gain
on investments

   (1.23 )   (0.40 )    (1.59 )     
Total distributions declared
to shareholders
   $(1.29 )   $(0.40 )    $(1.59 )    $—  
Net asset value, end of period    $11.23     $14.54      $12.99      $14.09  
Total return (%) (r)(s)    (14.71 )(n)   15.25      3.61      8.14 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                          
Expenses before expense reductions (f)    2.05 (a)   2.09      2.19      2.21 (a)
Expenses after expense reductions (f)    2.05 (a)   2.04      2.09      2.20 (a)
Net investment income (loss)    0.08 (a)   0.07      (0.32 )    (0.83 )(a)
Portfolio turnover    35     56      122      126  
Net assets at end of period
(000 Omitted)
   $1,712     $1,215      $849      $313  

See Notes to Financial Statements

 

22


Financial Highlights – continued

 

    

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R2     
       2007      2006      2005 (i)  
Net asset value, beginning of period    $14.62     $13.06      $14.11      $13.03  
Income (loss) from
investment operations
                          

Net investment income (loss) (d)

   $0.03     $0.07      $0.04      $(0.03 )

Net realized and unrealized gain
(loss) on investments and
foreign currency

   (2.04 )   1.94      0.50      1.11 (g)
Total from investment operations    $(2.01 )   $2.01      $0.54      $1.08  
Less distributions declared
to shareholders
                          

From net investment income

   $(0.07 )   $(0.05 )    $—      $—  

From net realized gain
on investments

   (1.23 )   (0.40 )    (1.59 )     
Total distributions declared
to shareholders
   $(1.30 )   $(0.45 )    $(1.59 )    $—  
Net asset value, end of period    $11.31     $14.62      $13.06      $14.11  
Total return (%) (r)(s)    (14.54 )(n)   15.67      3.98      8.29 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                          
Expenses before expense reductions (f)    1.59 (a)   1.75      1.88      1.90 (a)
Expenses after expense reductions (f)    1.59 (a)   1.69      1.73      1.89 (a)
Net investment income (loss)    0.51 (a)   0.47      0.28      (0.42 )(a)
Portfolio turnover    35     56      122      126  
Net assets at end of period
(000 Omitted)
   $7,895     $8,273      $4,933      $410  

See Notes to Financial Statements

 

23


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R3     2007     2006     2005     2004 (i)  
                           
Net asset value, beginning of period   $14.93     $13.29     $14.31     $13.06     $11.39  
Income (loss) from
investment operations
                             

Net investment income (loss) (d)

  $0.04     $0.08     $0.01     $(0.06 )   $(0.06 )

Net realized and unrealized gain
(loss) on investments and
foreign currency

  (2.08 )   1.99     0.56     2.54     1.74 (g)
Total from investment operations   $(2.04 )   $2.07     $0.57     $2.48     $1.68  
Less distributions declared
to shareholders
                             

From net investment income

  $(0.10 )   $(0.03 )   $—     $—     $—  

From net realized gain
on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )   (0.01 )
Total distributions declared
to shareholders
  $(1.33 )   $(0.43 )   $(1.59 )   $(1.23 )   $(0.01 )
Net asset value, end of period   $11.56     $14.93     $13.29     $14.31     $13.06  
Total return (%) (r)(s)   (14.50 )(n)   15.80     4.16     19.66     14.79 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                             
Expenses before expense reductions (f)   1.54 (a)   1.63     1.74     1.76     1.78 (a)
Expenses after expense reductions (f)   1.54 (a)   1.59     1.64     1.75     1.76 (a)
Net investment income (loss)   0.55 (a)   0.52     0.09     (0.45 )   (0.62 )(a)
Portfolio turnover   35     56     122     126     128  
Net assets at end of period
(000 Omitted)
  $4,107     $4,275     $2,415     $1,218     $212  

See Notes to Financial Statements

 

24


Financial Highlights – continued

 

    

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R4      2007      2006     2005 (i)  
                       
Net asset value, beginning of period    $15.11     $13.46      $14.45     $13.32  
Income (loss) from
investment operations
                         

Net investment income (loss) (d)

   $0.05     $0.12      $0.09     $(0.00 )(w)

Net realized and unrealized gain
(loss) on investments and
foreign currency

   (2.10 )   2.00      0.51     1.13 (g)
Total from investment operations    $(2.05 )   $2.12      $0.60     $1.13  
Less distributions declared
to shareholders
                         

From net investment income

   $(0.11 )   $(0.07 )    $—     $—  

From net realized gain
on investments

   (1.23 )   (0.40 )    (1.59 )    
Total distributions declared
to shareholders
   $(1.34 )   $(0.47 )    $(1.59 )   $—  
Net asset value, end of period    $11.72     $15.11      $13.46     $14.45  
Total return (%) (r)(s)    (14.37 )(n)   16.06      4.33     8.48 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                         
Expenses before expense reductions (f)    1.28 (a)   1.34      1.39     1.41 (a)
Expenses after expense reductions (f)    1.28 (a)   1.34      1.39     1.40 (a)
Net investment income (loss)    0.82 (a)   0.80      0.68     (0.06 )(a)
Portfolio turnover    35     56      122     126  
Net assets at end of period
(000 Omitted)
   $1,608     $1,187      $1,194     $54  

See Notes to Financial Statements

 

25


Financial Highlights – continued

 

    

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class R5      2007      2006      2005 (i)  
                        
Net asset value, beginning of period    $15.21     $13.53      $14.48      $13.32  
Income (loss) from
investment operations
                          

Net investment income (d)

   $0.07     $0.17      $0.08      $0.02  

Net realized and unrealized gain
(loss) on investments and
foreign currency

   (2.12 )   2.00      0.56      1.14 (g)
Total from investment operations    $(2.05 )   $2.17      $0.64      $1.16  
Less distributions declared
to shareholders
                          

From net investment income

   $(0.15 )   $(0.09 )    $—      $—  

From net realized gain
on investments

   (1.23 )   (0.40 )    (1.59 )     
Total distributions declared
to shareholders
   $(1.38 )   $(0.49 )    $(1.59 )    $—  
Net asset value, end of period    $11.78     $15.21      $13.53      $14.48  
Total return (%) (r)(s)    (14.29 )(n)   16.37      4.63      8.71 (n)
Ratios (%) (to average net assets)
and Supplemental data:
                          
Expenses before expense reductions (f)    1.01 (a)   1.04      1.09      1.11 (a)
Expenses after expense reductions (f)    1.01 (a)   1.04      1.09      1.10 (a)
Net investment income    1.08 (a)   1.11      0.60      0.24 (a)
Portfolio turnover    35     56      122      126  
Net assets at end of period
(000 Omitted)
   $57     $66      $57      $54  

See Notes to Financial Statements

 

26


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class 529A     2007     2006     2005     2004     2003  
                                 
Net asset value, beginning of period   $14.96     $13.29     $14.32     $13.05     $10.68     $8.55  
Income (loss) from investment operations                                    

Net investment income (loss) (d)

  $0.03     $0.08     $0.01     $(0.04 )   $(0.05 )   $(0.02 )

Net realized and unrealized gain
(loss) on investments and foreign currency

  (2.08 )   1.99     0.55     2.54     2.42     2.15  
Total from investment operations   $(2.05 )   $2.07     $0.56     $2.50     $2.37     $2.13  
Less distributions declared to shareholders                                    

From net investment income

  $(0.08 )   $(0.00 )(w)   $—     $—     $—     $—  

From net realized gain
on investments

  (1.23 )   (0.40 )   (1.59 )   (1.23 )        
Total distributions declared to shareholders   $(1.31 )   $(0.40 )   $(1.59 )   $(1.23 )   $—     $—  
Net asset value, end of period   $11.60     $14.96     $13.29     $14.32     $13.05     $10.68  
Total return (%) (r)(s)(t)   (14.51 )(n)   15.83     4.08     19.83     22.19     24.91  
Ratios (%) (to average net assets)
and Supplemental data:
                                   
Expenses before expense reductions (f)   1.56 (a)   1.54     1.59     1.61     1.62     1.75  
Expenses after expense reductions (f)   1.56 (a)   1.54     1.59     1.60     1.60     1.59  
Net investment income (loss)   0.53 (a)   0.60     0.11     (0.32 )   (0.42 )   (0.18 )
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period
(000 Omitted)
  $847     $1,048     $1,252     $1,038     $643     $262  

See Notes to Financial Statements

 

27


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class 529B     2007     2006     2005     2004     2003  
                                 
Net asset value, beginning of period   $14.35     $12.84     $13.97     $12.84     $10.58     $8.52  
Income (loss) from investment operations                                    

Net investment loss (d)

  $(0.01 )   $(0.01 )   $(0.07 )   $(0.13 )   $(0.13 )   $(0.08 )

Net realized and unrealized gain
(loss) on investments and foreign currency

  (2.00 )   1.92     0.53     2.49     2.39     2.14  
Total from investment operations   $(2.01 )   $1.91     $0.46     $2.36     $2.26     $2.06  
Less distributions declared to shareholders                                    

From net realized gain
on investments

  $(1.23 )   $(0.40 )   $(1.59 )   $(1.23 )   $—     $—  
Net asset value, end of period   $11.11     $14.35     $12.84     $13.97     $12.84     $10.58  
Total return (%) (r)(s)(t)   (14.82 )(n)   15.11     3.40     19.01     21.36     24.18  
Ratios (%) (to average net assets) and Supplemental data:                                    
Expenses before expense reductions (f)   2.21 (a)   2.19     2.24     2.26     2.26     2.40  
Expenses after expense reductions (f)   2.21 (a)   2.19     2.24     2.25     2.24     2.24  
Net investment loss   (0.12 )(a)   (0.04 )   (0.56 )   (0.97 )   (1.07 )   (0.82 )
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period
(000 Omitted)
  $234     $293     $214     $174     $135     $59  

See Notes to Financial Statements

 

28


Financial Highlights – continued

 

   

Six months
ended
3/31/08

(unaudited)

    Years ended 9/30  
Class 529C     2007     2006     2005     2004     2003  
                                 
Net asset value, beginning of period   $14.38     $12.87     $14.00     $12.86     $10.59     $8.52  
Income (loss) from investment operations                                    

Net investment loss (d)

  $(0.01 )   $(0.01 )   $(0.07 )   $(0.13 )   $(0.13 )   $(0.08 )

Net realized and unrealized gain
(loss) on investments and
foreign currency

  (2.00 )   1.92     0.53     2.50     2.40     2.15  
Total from investment operations   $(2.01 )   $1.91     $0.46     $2.37     $2.27     $2.07  
Less distributions declared to shareholders                                    

From net realized gain on investments

  $(1.23 )   $(0.40 )   $(1.59 )   $(1.23 )   $—     $—  
Net asset value, end of period   $11.14     $14.38     $12.87     $14.00     $12.86     $10.59  
Total return (%) (r)(s)(t)   (14.79 )(n)   15.08     3.39     19.06     21.44     24.30  
Ratios (%) (to average net assets) and Supplemental data:                                    
Expenses before expense reductions (f)   2.21 (a)   2.19     2.24     2.26     2.26     2.40  
Expenses after expense reductions (f)   2.21 (a)   2.19     2.24     2.25     2.24     2.24  
Net investment loss   (0.14 )(a)   (0.04 )   (0.55 )   (0.95 )   (1.06 )   (0.85 )
Portfolio turnover   35     56     122     126     128     158  
Net assets at end of period (000 Omitted)   $322     $439     $396     $353     $178     $44  

See Notes to Financial Statements

 

29


Financial Highlights – continued

 

Any redemption fees charged by the fund during the 2004 and 2005 fiscal years resulted in a per share impact of less than $0.01.

(a) Annualized.
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(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.
(i) For the period from the class’ inception, December 31, 2002 (Class R), October 31, 2003 (Class R3), and April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.

See Notes to Financial Statements

 

30


 

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

(1)   Business and Organization

MFS Mid Cap Value Fund (the fund) is a series of MFS Series Trust XI (the trust). The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

 

(2)   Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The fund can invest in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s legal, political, and economic environment.

Investment Valuations – Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities for which there were no sales reported that day, equity securities are generally valued at the last quoted daily bid quotation as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities held short for which there were no sales reported for the day, the position is generally valued at the last quoted daily ask quotation as reported by an independent pricing service on the market or exchange on which such securities are primarily traded. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates reported by an independent pricing service.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures

 

31


Notes to Financial Statements (unaudited) – continued

 

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 independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine the fund’s net asset value may differ from quoted or published prices for the same investments.

In September 2006, FASB Statement No. 157, Fair Value Measurements (the “Statement”) was issued, and is effective for fiscal years beginning after November 15, 2007 and for all interim periods within those fiscal years. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Management is evaluating the application of the Statement to the fund, and believes the impact will be limited to expanded disclosures resulting from the adoption of this Statement in the fund’s financial statements.

Repurchase Agreements – The fund may enter into repurchase agreements with institutions that the fund’s investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. The fund requires that the securities collateral in a repurchase transaction be transferred to a custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. The fund monitors, on a daily basis, the value of the collateral to ensure that its value, including accrued interest, is greater than amounts owed to the fund under each such repurchase agreement. The fund and other funds managed by Massachusetts Financial Services Company (MFS), may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

 

32


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. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign exchange rate movements on income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.

In March 2008, FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (the “Standard”) was issued, and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Standard provides enhanced disclosures about the fund’s use of and accounting for derivative instruments and the effect of derivative instruments on the fund’s results of operations and financial position. Management is evaluating the application of the Standard to the fund, and has not at this time determined the impact, if any, resulting from the adoption of this Standard on the fund’s financial statements.

Indemnifications – Under the fund’s organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into agreements with service providers that may contain indemnification clauses. The fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date.

The fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

 

33


Notes to Financial Statements (unaudited) – continued

 

Fees Paid Indirectly – The fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the fund. This amount, for the six months ended March 31, 2008, is shown as a reduction of total expenses on the Statement of Operations.

Tax Matters and Distributions – The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As a result, no provision for federal income tax is required. The fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“the Interpretation”) on the first day of the fund’s fiscal year. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There was no impact resulting from the adoption of this Interpretation on the fund’s financial statements. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. It is the fund’s policy to record interest and penalty charges on underpaid taxes associated with its tax positions as interest expense and miscellaneous expense, respectively. No such charges were recorded in the current financial statements. Foreign taxes, if any, have been accrued by the fund in the accompanying financial statements.

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.

Book/tax differences primarily relate to wash sale loss deferrals and treating a portion of the proceeds from redemptions as a distribution for tax purposes.

The tax character of distributions made during the current period will be determined at fiscal year end. The tax character of distributions declared to shareholders is as follows:

 

     9/30/07
Ordinary income (including any
short-term capital gains)
   $5,384,992
Long-term capital gain    22,278,202
Total distributions    $27,663,194

 

34


Notes to Financial Statements (unaudited) – continued

 

The federal tax cost and the tax basis components of distributable earnings were as follows:

 

As of 3/31/08       
Cost of investments    $844,134,181  
Gross appreciation    60,996,999  
Gross depreciation    (91,787,794 )
Net unrealized appreciation (depreciation)    $(30,790,795 )
As of 9/30/07       
Undistributed ordinary income    38,999,523  
Undistributed long-term capital gain    33,450,144  
Net unrealized appreciation (depreciation)    94,269,312  

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

Multiple Classes of Shares of Beneficial Interest – The fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the fund based on daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class 529B shares will convert to Class A and Class 529A shares, respectively, approximately eight years after purchase.

 

(3)   Transactions with Affiliates

Investment Adviser – The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund.

The management fee is computed daily and paid monthly at an annual rate of 0.75% of the fund’s average daily net assets.

The investment adviser has agreed in writing to reduce its management fee to 0.70% of average daily net assets in excess of $1 billion. This written agreement may be rescinded only upon consent of the fund’s Board of Trustees. For the six months ended March 31, 2008, the fund’s average daily net assets did not exceed $1 billion and therefore, the management fee was not reduced.

The investment adviser has agreed in writing to pay a portion of the fund’s operating expenses, exclusive of management, distribution and service, retirement plan administration and services, program manager, and certain other fees and expenses, such that operating expenses do not exceed 0.25% annually of the fund’s average daily net assets. This written agreement will continue through January 31, 2009 unless changed or rescinded by the fund’s Board of Trustees. For the six months ended March 31, 2008, the fund’s actual

 

35


Notes to Financial Statements (unaudited) – continued

 

operating expenses did not exceed the limit and therefore, the investment adviser did not pay any portion of the fund’s expenses.

Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $9,366 and $527 for the six months ended March 31, 2008, as its portion of the initial sales charge on sales of Class A and Class 529A shares of the fund, respectively.

The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.

The fund’s distribution plan provides that the fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.

Distribution Plan Fee Table:

 

     Distribution
Fee Rate
   Service
Fee Rate
   Total
Distribution
Plan (d)
   Annual
Effective
Rate (e)
   Distribution
and Service
Fee
Class A    0.10%    0.25%    0.35%    0.35%    $350,214
Class B    0.75%    0.25%    1.00%    1.00%    299,456
Class C    0.75%    0.25%    1.00%    1.00%    167,222
Class R    0.25%    0.25%    0.50%    0.50%    4,837
Class R1    0.75%    0.25%    1.00%    0.80%    6,029
Class R2    0.25%    0.25%    0.50%    0.50%    20,415
Class R3    0.25%    0.25%    0.50%    0.50%    11,130
Class R4       0.25%    0.25%    0.25%    1,800
Class 529A    0.25%    0.25%    0.50%    0.35%    1,621
Class 529B    0.75%    0.25%    1.00%    1.00%    1,352
Class 529C    0.75%    0.25%    1.00%    1.00%    1,911
Total Distribution and Service Fees    $865,987

 

(d) In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees up to these annual percentage rates of each class’ average daily net assets.
(e) The annual effective rates represent actual fees incurred under the distribution plan for the six months ended March 31, 2008 based on each class’ average daily net assets. 0.10% of the Class 529A distribution fee is currently being paid by the fund. Payment of the remaining 0.15% of the Class 529A distribution fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. Effective March 1, 2008, the distribution fee rate for Class R1 shares increased from 0.50% to 0.75%.

Certain Class A, Class C and Class 529C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within 12 months of purchase. Class B and Class 529B shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within six years

 

36


Notes to Financial Statements (unaudited) – continued

 

of purchase. All contingent deferred sales charges are paid to MFD and during the six months ended March 31, 2008, were as follows:

 

     Amount
Class A    $233
Class B    34,207
Class C    3,767
Class 529B    29
Class 529C   

The fund has entered into and may from time to time enter into contracts with program managers and other parties which administer the tuition programs through which an investment in the fund’s 529 share classes is made. The fund has entered into an agreement with MFD pursuant to which MFD receives an annual fee of up to 0.35% of the average daily net assets attributable to each 529 share class. The fee is based on average daily net assets and is currently established at 0.25% annually of average daily net assets of the fund’s 529 share classes. Effective April 1, 2008, the fee will be 0.10%. The fee may only be increased with the approval of the Board of Trustees who oversees the fund. The services provided by MFD, or a third party with which MFD contracts, include recordkeeping and tax reporting and account services, as well as services designed to maintain the program’s compliance with the Internal Revenue Code and other regulatory requirements. Program manager fees for the six months ended March 31, 2008, were as follows:

 

     Amount
Class 529A    $1,158
Class 529B    338
Class 529C    478
Total Program Manager Fees    $1,974

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 March 31, 2008, the fee was $158,935, which equated to 0.0356% annually of the fund’s average daily net assets. MFSC also receives payment from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the six months ended March 31, 2008, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $206,879.

Effective May 1, 2007, under a Special Servicing Agreement among MFS, each MFS fund which invests in other MFS funds (“MFS fund-of-funds”) and each underlying fund in which a MFS fund-of-funds invests (“underlying funds”), each underlying fund may pay a portion of each MFS fund-of-fund’s transfer

 

37


Notes to Financial Statements (unaudited) – continued

 

agent-related expenses, including sub-accounting fees payable to financial intermediaries, to the extent such payments do not exceed the benefits realized or expected to be realized by the underlying fund from the investment in the underlying fund by the MFS fund-of-fund. For the six months ended March 31, 2008, these costs for the fund amounted to $225,950 and are reflected in the shareholder servicing costs on the Statement of Operations.

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund partially reimburses MFS the costs incurred to provide these services. The fund is charged a fixed amount plus a fee based on average daily net assets. The fund’s annual fixed amount is $17,500.

The administrative services fee incurred for the six months ended March 31, 2008 was equivalent to an annual effective rate of 0.0146% of the fund’s average daily net assets.

In addition to the administrative services provided by MFS to the fund as described above, MFS is responsible for providing certain retirement plan administration and services with respect to certain shares. These services include various administrative, recordkeeping, and communication/educational services with respect to the retirement plans which invest in these shares, and may be provided directly by MFS or by a third party. MFS may subsequently pay all, or a portion, of the retirement plan administration and services fee to affiliated or unaffiliated third parties. For the six months ended March 31, 2008, the fund paid MFS an annual retirement plan administration and services fee up to the following annual percentage rates of each class’ average daily net assets:

 

     Beginning
of period
through
12/31/07
   Effective
1/01/08
   Effective
3/01/08
   Annual
Effective
Rate (g)
   Total
Amount

Class R1

   0.35%    0.35%       0.28%    $2,144

Class R2

   0.25%          0.13%    5,196

Class R3

   0.15%          0.08%    1,734

Class R4

   0.15%          0.06%    461

Class R5

   0.10%          0.05%    16
Total Retirement Plan Administration and Services Fees          $9,551

 

(g) Effective January 1, 2008, the annual retirement plan administration and services fee was eliminated for Class R2, Class R3, Class R4, and Class R5 shares. Effective March 1, 2008, the annual retirement plan administration and services fee was eliminated for Class R1 shares.

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

 

38


Notes to Financial Statements (unaudited) – continued

 

compensation directly to trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration for their services to the fund from MFS. Certain officers and trustees of the fund are officers or directors of MFS, MFD, and MFSC.

Other – This fund and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. For the six months ended March 31, 2008, the fee paid by the fund to Tarantino LLC was $3,537 and is included in miscellaneous expense on the Statement of Operations. MFS has agreed to reimburse the fund for a portion of the payments made by the fund to Tarantino LLC in the amount of $2,036, which is shown as a reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO.

 

(4)   Portfolio Securities

Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term obligations, aggregated $380,952,048 and $309,461,144, 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
3/31/08
   Year ended
9/30/07
     Shares    Amount    Shares    Amount
Shares sold            

Class A

   7,281,822    $107,752,610    2,803,924    $41,815,294

Class B

   152,812    1,964,979    672,146    9,601,911

Class C

   209,125    2,730,020    680,999    9,713,880

Class I

   2,888,115    40,320,813    3,237,747    48,616,352

Class R

   57,812    812,447    113,556    1,683,438

Class R1

   73,307    948,176    100,466    1,424,063

Class R2

   226,003    2,872,579    479,553    6,895,787

Class R3

   146,435    1,988,403    379,368    5,553,895

Class R4

   67,203    938,054    171,583    2,520,600

Class R5

           

Class 529A

   7,020    92,964    15,581    230,632

Class 529B

   843    10,606    5,289    74,230

Class 529C

   2,210    29,042    4,835    67,551
   11,112,707    $160,460,693    8,665,047    $128,197,633

 

39


Notes to Financial Statements (unaudited) – continued

 

     Six months ended
3/31/08
     Year ended
9/30/07
 
     Shares      Amount      Shares      Amount  
Shares issued to shareholders
in reinvestment of distributions
           

Class A

   886,184      $11,431,766      310,425      $4,383,192  

Class B

   412,477      5,143,592      170,422      2,327,961  

Class C

   219,904      2,744,401      76,472      1,045,379  

Class I

   4,361,712      57,312,898      1,301,900      18,681,665  

Class R

   7,701      99,728      12,273      172,675  

Class R1

   11,907      147,283      1,897      25,855  

Class R2

   64,840      806,623      14,382      196,603  

Class R3

   35,618      453,058      5,700      79,321  

Class R4

   12,221      157,530      3,129      44,111  

Class R5

   464      6,010      147      2,092  

Class 529A

   6,965      88,877      1,815      25,379  

Class 529B

   2,062      25,265      508      6,853  

Class 529C

   2,823      34,695      901      12,175  
   6,024,878      $78,451,726      1,899,971      $27,003,261  
Shares reacquired            

Class A

   (3,005,819 )    $(40,096,245 )    (4,174,046 )    $(61,492,985 )

Class B

   (1,314,698 )    (16,711,576 )    (2,688,807 )    (38,291,132 )

Class C

   (843,872 )    (10,897,956 )    (1,010,202 )    (14,302,789 )

Class I

   (1,146,077 )    (14,428,705 )    (1,342,532 )    (20,342,980 )

Class R

   (301,070 )    (4,314,077 )    (328,099 )    (4,823,914 )

Class R1

   (16,307 )    (209,415 )    (84,192 )    (1,189,600 )

Class R2

   (158,906 )    (1,962,657 )    (305,666 )    (4,431,150 )

Class R3

   (113,103 )    (1,438,970 )    (280,414 )    (4,083,892 )

Class R4

   (20,831 )    (281,168 )    (184,838 )    (2,750,625 )

Class R5

                   

Class 529A

   (10,983 )    (149,015 )    (41,561 )    (559,269 )

Class 529B

   (2,302 )    (26,627 )    (1,992 )    (27,561 )

Class 529C

   (6,613 )    (82,878 )    (6,023 )    (85,279 )
   (6,940,581 )    $(90,599,289 )    (10,448,372 )    $(152,381,176 )
Net change            

Class A

   5,162,187      $79,088,131      (1,059,697 )    $(15,294,499 )

Class B

   (749,409 )    (9,603,005 )    (1,846,239 )    (26,361,260 )

Class C

   (414,843 )    (5,423,535 )    (252,731 )    (3,543,530 )

Class I

   6,103,750      83,205,006      3,197,115      46,955,037  

Class R

   (235,557 )    (3,401,902 )    (202,270 )    (2,967,801 )

Class R1

   68,907      886,044      18,171      260,318  

Class R2

   131,937      1,716,545      188,269      2,661,240  

Class R3

   68,950      1,002,491      104,654      1,549,324  

Class R4

   58,593      814,416      (10,126 )    (185,914 )

Class R5

   464      6,010      147      2,092  

Class 529A

   3,002      32,826      (24,165 )    (303,258 )

Class 529B

   603      9,244      3,805      53,522  

Class 529C

   (1,580 )    (19,141 )    (287 )    (5,553 )
   10,197,004      $148,313,130      116,646      $2,819,718  

 

40


Notes to Financial Statements (unaudited) – continued

 

The fund is one of several mutual funds in which the MFS funds-of-funds may invest. The MFS funds-of-funds do not invest in the underlying MFS funds for the purpose of exercising management or control. At the end of the period, the MFS Growth Allocation Fund, MFS Aggressive Growth Allocation Fund, and MFS Moderate Allocation Fund were the owners of record of approximately 30%, 22%, and 13%, respectively, of the value of outstanding voting shares. In addition, the MFS Lifetime 2020 Fund, the MFS Lifetime 2030 Fund, and the MFS Lifetime 2040 Fund were each the owners of record of less than 1% of the value of outstanding voting shares.

 

(6)   Line of Credit

The fund and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, the fund and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the six months ended March 31, 2008, the fund’s commitment fee and interest expense were $1,819 and $0, respectively, and are included in miscellaneous expense on the Statement of Operations.

 

(7)   Subsequent Event

On April 18, 2008, Class R shares and Class R2 shares converted into Class R3 shares. After the conversion, Class R3, Class R4, and Class R5 were renamed Class R2, Class R3, and Class R4, respectively.

 

41


 

RESULTS OF SHAREHOLDER MEETING

(unaudited)

At a special meeting of shareholders of Class R1 shares of the MFS Mid Cap Value Fund, which was held on February 15, 2008, the following actions were taken:

Item 1: To approve an amendment to the current Master Distribution Plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, with respect to Class R1 Shares of the fund.

 

     Number of Dollars
For    946,495.26
Against    0.00
Abstain    104,047.47

 

42


 

BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT

A discussion regarding the Board’s most recent review and renewal of the Fund’s investment advisory agreement is available by clicking on the fund’s name under “Select a fund” on the MFS Web site (mfs.com).

PROXY VOTING POLICIES AND INFORMATION

A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

100 F Street, NE, Room 1580

Washington, D.C. 20549

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.

A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.

 

43


LOGO


LOGO


MFS® Union Standard® Equity Fund

 

LETTER FROM THE CEO      1
PORTFOLIO COMPOSITION      2
EXPENSE TABLE      3
PORTFOLIO OF INVESTMENTS      5
STATEMENT OF ASSETS AND LIABILITIES      10
STATEMENT OF OPERATIONS      12
STATEMENTS OF CHANGES IN NET ASSETS      13
FINANCIAL HIGHLIGHTS      14
NOTES TO FINANCIAL STATEMENTS      19
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT      27
PROXY VOTING POLICIES AND INFORMATION      27
QUARTERLY PORTFOLIO DISCLOSURE      27
CONTACT INFORMATION BACK COVER

The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

 

NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ

NO BANK OR CREDIT UNION GUARANTEE Ÿ NOT A DEPOSIT Ÿ

NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR

NCUA/NCUSIF

 

3/31/08

UNE-SEM


LOGO

 

LETTER FROM THE CEO

Dear Shareholders:

Many of our MFS® fund shareholders have been justifiably concerned, as have most investors around the world, about the state of the global economy. As we enter 2008 we see the market volatility that began in the third quarter of 2007 has intensified.

We here at MFS, and those before us who guided the firm with the same disciplined investment process, have weathered many major economic disruptions over our eight-plus decades of managing clients’ investments. We have managed money through the Great Depression, 14 recessions, as well as numerous market crises caused by wars, political upheavals, and terrorist attacks. MFS remains in business because our investors believe in the integrity of our long-term investment strategy and its proven results.

Worries over market volatility are valid, and investors cannot always expect to see the kind of returns stocks have delivered in the bull markets of past years. Yet we believe our strategy of ADR allocating across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain your desired allocation — can help you pursue the highest investment returns while minimizing the effects of market fluctuations.

MFS is a world leader in domestic and global investing. Our team approach is research driven, globally integrated, and balanced. We have 176 investment management professionals located in the Americas, Europe, and Asia who focus on the fundamentals of each security and then integrate our sophisticated quantitative approach.* This collaborative process allows us to find opportunities in any market environment.

I personally would like to thank you for your continued business. We want you to be confident that we are constantly managing our fund offerings with you in mind, while adding new products that can help you to choose what fits your unique financial goals.

Respectfully,

LOGO

Robert J. Manning

Chief Executive Officer and Chief Investment Officer

MFS Investment Management®

May 15, 2008

* as of 12/31/07

The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.

 

1


PORTFOLIO COMPOSITION

 

LOGO

 

Top ten holdings  
Exxon Mobil Corp.   5.4%
Johnson & Johnson   3.0%
Chevron Corp.   3.0%
Intel Corp.   2.5%
AT&T, Inc.   2.4%
International Business Machines Corp.   2.4%
ConocoPhillips   2.3%
Bank of America Corp.   2.3%
JPMorgan Chase & Co.   2.2%
PepsiCo, Inc.   2.2%

 

Equity sectors  
Financial Services   14.7%
Technology   14.6%
Energy   12.1%
Health Care   10.9%
Industrial Goods & Services   10.7%
Utilities & Communications   10.3%
Consumer Staples   9.0%
Retailing   6.1%
Basic Materials   5.9%
Leisure   3.6%
Autos & Housing   0.7%

 

Percentages are based on net assets as of 3/31/08.

The portfolio is actively managed and current holdings may be different.

 

2


 

EXPENSE TABLE

Fund expenses borne by the shareholders during the period, October 1, 2007 through March 31, 2008

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 October 1, 2007 through March 31, 2008.

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
10/01/07
  Ending
Account Value
3/31/08
  Expenses
Paid During
Period (p)
10/01/07-3/31/08
A   Actual   1.30%   $1,000.00   $867.12   $6.07
  Hypothetical (h)   1.30%   $1,000.00   $1,018.50   $6.56
B   Actual   1.95%   $1,000.00   $864.47   $9.09
  Hypothetical (h)   1.95%   $1,000.00   $1,015.25   $9.82
C   Actual   1.95%   $1,000.00   $864.70   $9.09
  Hypothetical (h)   1.95%   $1,000.00   $1,015.25   $9.82
I   Actual   0.95%   $1,000.00   $868.78   $4.44
  Hypothetical (h)   0.95%   $1,000.00   $1,020.25   $4.80

 

(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. Effective June 1, 2008 the fund’s management fee will be reduced to 0.60% of the fund’s average daily net assets. In addition, effective June 1, 2008, 0.05% of the Class A distribution fee will be waived under a written waiver agreement through January 31, 2010. Effective June 1, 2008, the investment advisor has also agreed in writing to pay a portion of the fund’s operating expenses, exclusive of certain other fees and expenses, such that total annual operating expenses do not exceed the following rates annually of the fund’s average daily net assets with respect to each class: Class A: 0.90%, Class B: 1.60%, Class C: 1.60% and Class I: 0.60% (as described in Note 3 of the Notes to Financial Statements). Had these fee changes been in effect throughout the entire six month period, the annualized expense ratio would have been 0.90%, 1.60%, 1.60% and 0.60% for Class A, B, C and I, respectively. The actual expenses during the period would have been approximately $4.22, $7.49, $7.49 and $2.82 and the hypothetical expenses would have been approximately $4.56, $8.09, $8.09 and $3.04 for Class A, B, C and I, respectively.

 

4


 

PORTFOLIO OF INVESTMENTS

3/31/08 (unaudited)

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Common Stocks - 98.6%           
Issuer    Shares/Par   Value ($)
    
Aerospace - 3.0%           
Boeing Co.    4,420   $ 328,710
Lockheed Martin Corp.    9,033     896,977
Northrop Grumman Corp.    18,139     1,411,396
        
         $ 2,637,083
Automotive - 0.7%           
Cooper Tire & Rubber Co.    12,700   $ 190,119
Goodyear Tire & Rubber Co. (a)    17,080     440,664
        
         $ 630,783
Brokerage & Asset Managers - 3.8%           
Goldman Sachs Group, Inc.    8,560   $ 1,415,738
Lehman Brothers Holdings, Inc.    10,820     407,265
Merrill Lynch & Co., Inc.    9,066     369,349
Morgan Stanley    23,990     1,096,343
        
         $ 3,288,695
Cable TV - 1.9%           
Comcast Corp., “A”    85,230   $ 1,648,348
Chemicals - 1.2%           
PPG Industries, Inc.    16,600   $ 1,004,466
Computer Software - 5.0%           
McAfee, Inc. (a)    13,700   $ 453,333
Microsoft Corp.    54,120     1,535,926
Oracle Corp. (a)    46,080     901,325
Symantec Corp. (a)    31,150     517,713
VeriSign, Inc. (a)    26,690     887,176
        
         $ 4,295,473
Computer Software - Systems - 3.2%           
Apple Computer, Inc. (a)    2,580   $ 370,230
EMC Corp. (a)    21,100     302,574
International Business Machines Corp.    17,990     2,071,369
        
         $ 2,744,173

 

5


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks – continued           
Consumer Goods & Services - 2.8%           
Colgate-Palmolive Co.    10,600   $ 825,846
Kimberly-Clark Corp.    3,910     252,391
Procter & Gamble Co.    19,190     1,344,643
        
         $ 2,422,880
Containers - 0.4%           
Rock-Tenn Co., “A”    11,540   $ 345,854
Electrical Equipment - 3.1%           
General Electric Co.    29,208   $ 1,080,988
Rockwell Automation, Inc.    16,000     918,720
Tyco International Ltd. (a)    15,355     676,388
        
         $ 2,676,096
Electronics - 3.4%           
Intel Corp.    103,460   $ 2,191,283
Intersil Corp., “A”    14,500     372,215
SanDisk Corp. (a)    18,840     425,219
        
         $ 2,988,717
Energy - Integrated - 12.1%           
Chevron Corp.    30,180   $ 2,576,165
ConocoPhillips    26,300     2,004,323
Exxon Mobil Corp.    55,712     4,712,121
Marathon Oil Corp.    27,220     1,241,232
        
         $ 10,533,841
Food & Beverages - 3.5%           
General Mills, Inc.    19,529   $ 1,169,397
PepsiCo, Inc.    26,180     1,890,196
        
         $ 3,059,593
Food & Drug Stores - 3.4%           
CVS Caremark Corp.    41,410   $ 1,677,519
Kroger Co.    48,700     1,236,980
        
         $ 2,914,499
General Merchandise - 1.2%           
J.C. Penney Corp., Inc.    5,510   $ 207,782
Macy’s, Inc.    37,538     865,626
        
         $ 1,073,408

 

6


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks – continued           
Insurance - 6.4%           
Allied World Assurance Co. Holdings Ltd.    12,610   $ 500,617
Genworth Financial, Inc., “A”    24,050     544,492
Hartford Financial Services Group, Inc.    11,347     859,762
Loews Corp.    14,930     600,485
MetLife, Inc.    22,850     1,376,941
RenaissanceRe Holdings Ltd.    3,110     161,440
Travelers Cos., Inc.    27,420     1,312,047
XL Capital Ltd., “A”    6,060     179,073
        
         $ 5,534,857
Internet - 1.6%           
Google, Inc., “A” (a)    3,150   $ 1,387,481
Machinery & Tools - 3.8%           
Caterpillar, Inc.    6,490   $ 508,102
Cummins, Inc.    8,120     380,178
Eaton Corp.    15,610     1,243,649
Timken Co.    39,337     1,169,096
        
         $ 3,301,025
Major Banks - 4.5%           
Bank of America Corp.    52,106   $ 1,975,338
JPMorgan Chase & Co.    45,300     1,945,635
        
         $ 3,920,973
Medical & Health Technology & Services - 1.2%           
AmerisourceBergen Corp.    14,970   $ 613,471
Cardinal Health, Inc.    7,850     412,204
        
         $ 1,025,675
Medical Equipment - 1.5%           
Zimmer Holdings, Inc. (a)    16,680   $ 1,298,705
Metals & Mining - 2.0%           
Allegheny Technologies, Inc.    6,300   $ 449,568
Freeport-McMoRan Copper & Gold, Inc.    8,069     776,399
United States Steel Corp.    3,930     498,599
        
         $ 1,724,566
Natural Gas - Pipeline - 1.7%           
Williams Cos., Inc.    44,870   $ 1,479,813

 

7


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Common Stocks – continued           
Network & Telecom - 1.4%           
Cisco Systems, Inc. (a)    26,820   $ 646,094
Corning, Inc.    9,150     219,966
QLogic Corp. (a)    21,710     333,249
        
         $ 1,199,309
Pharmaceuticals - 8.2%           
Bristol-Myers Squibb Co.    56,930   $ 1,212,609
Johnson & Johnson    40,298     2,614,131
Merck & Co., Inc.    43,040     1,633,368
Schering-Plough Corp.    14,630     210,818
Wyeth    33,751     1,409,442
        
         $ 7,080,368
Pollution Control - 0.8%           
Allied Waste Industries, Inc. (a)    60,740   $ 656,599
Restaurants - 1.7%           
YUM! Brands, Inc.    40,120   $ 1,492,865
Specialty Chemicals - 2.3%           
Air Products & Chemicals, Inc.    8,000   $ 736,000
Praxair, Inc.    14,790     1,245,762
        
         $ 1,981,762
Specialty Stores - 1.5%           
TJX Cos., Inc.    38,640   $ 1,277,825
Telephone Services - 5.2%           
AT&T, Inc.    55,230   $ 2,115,309
Qwest Communications International, Inc.    153,120     693,634
Verizon Communications, Inc.    46,205     1,684,172
        
         $ 4,493,115
Tobacco - 2.7%           
Altria Group, Inc.    32,478   $ 721,012
Philip Morris International, Inc. (a)    32,478     1,642,737
        
         $ 2,363,749
Utilities - Electric Power - 3.4%           
Edison International    24,050   $ 1,178,931
PG&E Corp.    13,130     483,447
Public Service Enterprise Group, Inc.    32,530     1,307,381
        
         $ 2,969,759
Total Common Stocks (Identified Cost, $81,585,394)        $ 85,452,355

 

8


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par   Value ($)
    
Short-Term Obligations - 1.5%             
American Express Credit Corp.,
2.8%, due 4/01/08,
at Amortized Cost and Value (y)
   $ 1,341,000   $ 1,341,000
Total Investments (Identified Cost, $82,926,394)          $ 86,793,355
Other Assets, Less Liabilities - (0.1)%            (93,516)
Net Assets - 100.0%          $ 86,699,839

 

(a) Non-income producing security.
(y) The rate shown represents an annualized yield at time of purchase.

See Notes to Financial Statements

 

9


Financial Statements

 

STATEMENT OF ASSETS AND LIABILITIES

At 3/31/08 (unaudited)

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

 

Assets          
Investments, at value (identified cost, $82,926,394)    $86,793,355   
Cash    351   
Receivable for fund shares sold    25,311   
Dividends receivable    90,447   
Other assets    1,962     
Total assets         $86,911,426
Liabilities          
Payable for fund shares reacquired    $142,522   
Payable to affiliates      

Management fee

   6,186   

Shareholder servicing costs

   1,059   

Distribution and service fees

   1,940   

Administrative services fee

   241   
Payable for independent trustees’ compensation    516   
Accrued expenses and other liabilities    59,123     
Total liabilities         $211,587
Net assets         $86,699,839
Net assets consist of:          
Paid-in capital    $80,884,861   
Unrealized appreciation (depreciation) on investments    3,866,961   
Accumulated net realized gain (loss) on investments    1,721,539   
Undistributed net investment income    226,478     
Net assets         $86,699,839
Shares of beneficial interest outstanding         6,048,097

 

10


Statement of Assets and Liabilities (unaudited) – continued

 

Class A shares          

Net assets

   $35,736,638   

Shares outstanding

   2,501,712     

Net asset value per share

        $14.28

Offering price per share (100 / 94.25 x net asset value per share)

        $15.15
Class B shares          

Net assets

   $2,787,702   

Shares outstanding

   198,558     

Net asset value and offering price per share

        $14.04
Class C shares          

Net assets

   $2,373,256   

Shares outstanding

   170,289     

Net asset value and offering price per share

        $13.94
Class I shares          

Net assets

   $45,802,243   

Shares outstanding

   3,177,538     

Net asset value, offering price, and redemption price per share

        $14.41

On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.

See Notes to Financial Statements

 

11


Financial Statements

 

STATEMENT OF OPERATIONS

Six months ended 3/31/08 (unaudited)

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

 

Net investment income              
Income      

Dividends

   $957,674     

Interest

   28,717         
Total investment income           $986,391  
Expenses      

Management fee

   $313,647     

Distribution and service fees

   103,832     

Shareholder servicing costs

   47,702     

Administrative services fee

   11,927     

Independent trustees’ compensation

   1,846     

Custodian fee

   11,832     

Shareholder communications

   17,914     

Auditing fees

   21,522     

Legal fees

   801     

Miscellaneous

   29,821         
Total expenses           $560,844  

Fees paid indirectly

   (156 )   

Reduction of expenses by investment adviser

   (222 )       
Net expenses           $560,466  
Net investment income           $425,925  
Realized and unrealized gain (loss) on investments              

Investment transactions

   $1,916,437         
Change in unrealized appreciation (depreciation)      

Investments

   $(16,009,102 )       
Net realized and unrealized gain (loss) on investments           $(14,092,665 )
Change in net assets from operations           $(13,666,740 )

See Notes to Financial Statements

 

12


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.

 

Change in net assets    Six months ended
3/31/08
(unaudited)
     Year ended
9/30/07
 
From operations              
Net investment income    $425,925      $658,970  
Net realized gain (loss) on investments    1,916,437      7,734,137  
Net unrealized gain (loss) on investments    (16,009,102 )    6,953,840  
Change in net assets from operations    $(13,666,740 )    $15,346,947  
Distributions declared to shareholders              
From net investment income      

Class A

   $(315,112 )    $(162,288 )

Class B

        (3,565 )

Class C

   (6,084 )    (3,383 )

Class I

   (536,208 )    (296,528 )
From net realized gain on investments      

Class A

   (201,917 )     

Class B

   (18,532 )     

Class C

   (16,071 )     

Class I

   (241,462 )     
Total distributions declared to shareholders    $(1,335,386 )    $(465,764 )
Change in net assets from fund share transactions    $(2,389,357 )    $21,920,314  
Total change in net assets    $(17,391,483 )    $36,801,497  
Net assets              
At beginning of period    104,091,322      67,289,825  
At end of period (including undistributed net investment income of $226,478 and $657,957, respectively)    $86,699,839      $104,091,322  

See Notes to Financial Statements

 

13


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 by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

    Six months
ended
3/31/08
    Years ended 9/30  
Class A     2007     2006     2005     2004     2003  
    (unaudited)                                
Net asset value, beginning of
period
  $16.67     $14.01     $12.33     $10.82     $9.49     $8.09  
Income (loss) from investment
operations
                          

Net investment income (d)

  $0.06     $0.09     $0.09     $0.10     $0.06     $0.05  

Net realized and unrealized
gain (loss) on investments

  (2.25 )   2.65     1.70     1.47     1.33     1.38  
Total from investment
operations
  $(2.19 )   $2.74     $1.79     $1.57     $1.39     $1.43  
Less distributions declared to
shareholders
                          

From net investment income

  $(0.12 )   $(0.08 )   $(0.11 )   $(0.06 )   $(0.06 )   $(0.03 )

From net realized gain on
investments

  (0.08 )