08/27/2024 | Press release | Distributed by Public on 08/27/2024 08:22
SUMMARY PROSPECTUS
August 28, 2024
MFS® Lifetime® 2040 Fund
Before you invest, you may want to review the fund's prospectus, which contains more information about the fund and its risks. You can find the fund's prospectus and other information about the fund, including the fund's reports to shareholders and statement of additional information, online at funds.mfs.com. You can also get this information at no cost by calling 1-800-225-2606 or by sending an e-mail request to [email protected]. The fund's prospectus and statement of additional information, both dated August 28, 2024, as may be amended or supplemented from time to time, are incorporated by reference into this summary prospectus.
CLASS |
TICKER SYMBOL |
Class A |
MLFAX |
Class B |
MLFBX |
Class C |
MLFCX |
Class I |
MLFIX |
Class R1 |
MLFEX |
Class R2 |
MLFGX |
Class R3 |
MLFHX |
Class R4 |
MLFJX |
Class R6 |
MLFKX |
Summary of Key Information
Investment Objective
The fund's investment objective is to seek a high level of total return consistent with its asset allocation until the approximate retirement year in the fund's name; thereafter, the fund will seek total return through a combination of current income and capital appreciation. The asset allocation of the fund will change over time.
Fees and Expenses
This table describes the fees and expenses that you may pay when you buy, hold, and sell shares of the fund. Investors may also pay commissions or other fees to their financial intermediaries when they buy, hold, and sell shares of the fund, which are not reflected below.
You may qualify for sales charge reductions if, with respect to Class A shares, you and certain members of your family invest, or agree to invest in the future, at least $50,000 in MFS funds. More information about these and other waivers and reductions is available from your financial intermediary and in "Sales Charges and Waivers and Reductions" on page 16 and "Appendix A - Waivers and Reductions of Sales Charges" on page A-1 of the fund's prospectus.
Shareholder Fees (fees paid directly from your investment): |
||||||||||||||||||||
Share Class |
A |
B |
C |
I |
R1 |
R2 |
R3 |
R4 |
R6 |
|||||||||||
Maximum Sales Charge (Load) |
5.75% |
None |
None |
None |
None |
None |
None |
None |
None |
|||||||||||
Maximum Deferred Sales Charge (Load) |
1.00%# |
4.00% |
1.00% |
None |
None |
None |
None |
None |
None |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment): |
|||||||||||||||||||||
Share Class |
A |
B |
C |
I |
R1 |
R2 |
R3 |
R4 |
R6 |
||||||||||||
Management Fee |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
||||||||||||
Distribution and/or Service (12b-1) Fees |
0.25% |
1.00% |
1.00% |
None |
1.00% |
0.50% |
0.25% |
None |
None |
||||||||||||
Other Expenses |
0.20% |
0.20% |
0.20% |
0.20% |
0.20% |
0.20% |
0.20% |
0.20% |
0.06% |
||||||||||||
Acquired (Underlying) Fund Fees and Expenses |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
||||||||||||
Total Annual Fund Operating Expenses |
1.01% |
1.76% |
1.76% |
0.76% |
1.76% |
1.26% |
1.01% |
0.76% |
0.62% |
||||||||||||
Fee Reductions, Expense Reimbursements and/or MFS Payments1 |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
(0.20)% |
||||||||||||
Total Annual Fund Operating Expenses After Fee Reductions, Expense Reimbursements and/or MFS Payments |
0.81% |
1.56% |
1.56% |
0.56% |
1.56% |
1.06% |
0.81% |
0.56% |
0.42% |
#This contingent deferred sales charge (CDSC) applies to shares purchased without an initial sales charge and redeemed within 18 months of purchase.
1Massachusetts Financial Services Company (MFS) has agreed in writing to bear the fund's expenses, excluding management fees, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs, investment-related expenses, and fees and expenses associated with investments in investment companies and other similar investment vehicles, or make payment to the fund, such that "Other Expenses" do not exceed 0.00% of the class' average daily net assets annually for each of Class A, Class B, Class C, Class I, Class R1, Class R2, Class R3, and Class R4 shares, and (0.14)% of the class' average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the fund's Board of Trustees, but such agreement will continue until at least August 31, 2025.
ML4-SUM-082824Page 1 of 6
Example
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.
The example assumes that: you invest $10,000 in the fund for the time periods indicated and you redeem your shares at the end of the time periods (unless otherwise indicated); your investment has a 5% return each year; and the fund's operating expenses remain the same.
Although your actual costs will likely be higher or lower, under these assumptions your costs would be:
1 YEAR |
3 YEARS |
5 YEARS |
10 YEARS |
|||||||
Class A Shares |
$653 |
$859 |
$1,082 |
$1,723 |
||||||
Class B Shares assuming1 |
||||||||||
redemption at end of period |
$559 |
$835 |
$1,135 |
$1,858 |
||||||
no redemption at end of period |
$159 |
$535 |
$935 |
$1,858 |
||||||
Class C Shares assuming1 |
||||||||||
redemption at end of period |
$259 |
$535 |
$935 |
$1,858 |
||||||
no redemption at end of period |
$159 |
$535 |
$935 |
$1,858 |
||||||
Class I Shares |
$57 |
$223 |
$403 |
$924 |
||||||
Class R1 Shares |
$159 |
$535 |
$935 |
$2,057 |
||||||
Class R2 Shares |
$108 |
$380 |
$672 |
$1,505 |
||||||
Class R3 Shares |
$83 |
$302 |
$538 |
$1,218 |
||||||
Class R4 Shares |
$57 |
$223 |
$403 |
$924 |
||||||
Class R6 Shares |
$43 |
$178 |
$326 |
$755 |
1Shares automatically convert to Class A shares approximately eight years after purchase; therefore, the expense examples reflect Class A share expenses after eight years.
Portfolio Turnover
The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These transaction costs, which are not reflected in "Annual Fund Operating Expenses" or in the "Example," affect the fund's performance. During the most recent fiscal year, the fund's portfolio turnover rate was 9% of the average value of its portfolio.
Principal Investment Strategies
The fund is designed to provide diversification among different asset classes for investors with the approximate retirement year in the fund's name. MFS (Massachusetts Financial Services Company, the fund's investment adviser) invests substantially all of the fund's assets in other MFS mutual funds, referred to as underlying funds.
MFS selects the asset class allocations based on a strategic asset allocation process that takes into account a variety of factors, including historical risk and performance, projected performance, and other factors. MFS' analyses of projected performance are primarily based on quantitative models using various inputs such as valuation metrics, growth rates, profitability, yields, and inflation. MFS may also consider current market conditions, its qualitative assessment of the risk/return characteristics of asset classes, and other factors in determining these allocations.
MFS employs the strategic asset allocation process described above to determine the amount of the fund's assets invested in (1) underlying funds that invest primarily in equity securities ("Equity Funds") and underlying funds that provide exposure to less traditional asset classes, such as real estate and commodities ("Non-Traditional Funds") and (2) underlying funds that invest primarily in debt instruments ("Bond Funds") and an underlying fund that invests in cash and/or cash equivalents ("Money Market Fund").
MFS selects the underlying funds within each asset class based on underlying fund classifications, historical risk, historical and projected performance of the represented asset classes, as well as other factors.
Within the Equity Fund allocation, MFS seeks to diversify by geography (by including domestic and international underlying funds), in terms of market capitalization (by including large, mid, and small capitalization underlying funds) and by style (by including both growth and value underlying funds). A portion of the fund's assets is also allocated to Non-Traditional Funds (i.e., asset classes less correlated to the overall equity and debt markets), which MFS believes provides further diversification benefits.
Within the Bond Fund allocation, MFS includes underlying funds with varying degrees of geographic, interest rate and credit exposure, including exposure to below investment grade quality debt instruments. A portion of the fund's assets may also be allocated to the Money Market Fund.
MFS normally invests the underlying funds' assets across different industries, sectors, countries, and regions, but MFS may invest a significant percentage of the underlying funds' assets in issuers in a single industry, sector, country, or region.
As of August 1, 2024, the fund's approximate long-term strategic allocation among asset classes was:
Equity Funds and Non-Traditional Funds |
82% |
Bond Funds and Money Market Fund |
18% |
All percentages are rounded to the nearest percent.
MFS may deviate from the long-term strategic allocations set forth above; however, any deviation from the long-term strategic allocation is not expected to be greater than plus or minus 10% under normal market conditions. At no time, however, will the fund's investments in Equity Funds and Non-Traditional Funds exceed 99%. Additionally, the fund's allocation to Non-Traditional Funds will not typically exceed 20% of the fund's assets.
As of August 1, 2024, the fund's approximate strategic allocation among asset classes was:
Equity Funds and Non-Traditional Funds |
81.7% |
U.S. Equity Funds |
52.6% |
International Equity Funds |
20.9% |
Non-Traditional Funds |
8.2% |
Bond Funds and Money Market Fund |
18.3% |
Bond Funds |
18.3% |
Money Market Fund |
0.0% |
All percentages are rounded to the nearest tenth of a percent. As a result, the sum of the asset class allocations presented in the table may not total 100%.
The asset class allocations for the fund, as well as the underlying funds and their weightings, are based on an allocation strategy designed for investors with the approximate retirement year in the fund's name. Investors should also consider their age, personal circumstances, risk tolerance, and overall investment strategy and allocation. The asset allocation strategy will become increasingly
Page 2 of 6
conservative over time, shifting more weight from Equity Funds and Non-Traditional Funds to Bond Funds and the Money Market Fund.
Upon reaching its stated target year, the fund's allocation strategy will be aligned with the allocation strategy of MFS Lifetime Income Fund. It is expected that the fund will be combined with MFS Lifetime Income Fund within five years of the date that its asset allocation strategy matches the asset allocation strategy of MFS Lifetime Income Fund. MFS Lifetime Income Fund is designed for investors who intend to withdraw assets over an extended period of time or who want an investment with an asset allocation mix similar to MFS Lifetime Income Fund's long-term strategic asset allocation. The chart below illustrates how the asset allocation strategy of the fund will change over time.
Principal Risks
As with any mutual fund, the fund may not achieve its objective and/or you could lose money on your investment in the fund, including near or after the target year. There is no guarantee that the fund will provide income at or through retirement. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
The principal risks of investing in the fund are:
Allocation Risk: MFS' assessment of the risk/return potential of asset classes and underlying funds, and the resulting allocation among asset classes and underlying funds, may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests.
Underlying Funds Risk: MFS' strategy of investing in underlying funds exposes the fund to the risks of the underlying funds. Each underlying fund pursues its own investment objective and strategies and may not achieve its objective. In addition to the fees and expenses the fund bears directly, shareholders of the fund will indirectly bear the fees and expenses of the underlying funds.
Investment Selection Risk: MFS' investment analysis, its development and use of quantitative models, and its selection of investments may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests. The quantitative models used by MFS (both proprietary and third-party) may not produce the intended results for a variety of reasons, including the factors used in the models, the weight placed on each factor in the models, changes from the market factors' historical trends, changing sources of market return or market risk, and technical issues in the design, development, implementation, application, and maintenance of the models (e.g., incomplete, stale, or inaccurate data, human error, programming or other software issues, coding errors, and technology failures).
Equity Market Risk/Company Risk:Equity markets are volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single issuer or type of security, issuers within a broad market sector, industry or geographic region, or the equity markets in general. Certain events can have a dramatic adverse effect on equity markets and may lead to periods of high volatility in an equity market or a segment of an equity market. The value of an investment held by the fund may decline due to factors directly related to the issuer.
Growth Company Risk: The stocks of growth companies can be more sensitive to the company's earnings and more volatile than the market in general.
Value Company Risk: The stocks of value companies can continue to be undervalued for long periods of time and not realize their expected value and can be more volatile than the market in general.
Intrinsic Value Strategy Risk: The stocks of companies that MFS believes are undervalued compared to their intrinsic value can continue to be undervalued for long periods of time, may not realize their expected value, and can be volatile.
Debt Market Risk: Debt markets can be volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single instrument, issuer, or borrower, a particular type of instrument, issuer, or borrower, a segment of the debt markets or the debt markets generally. Certain events can have a dramatic adverse effect on debt markets and may lead to periods of high volatility and reduced liquidity in a debt market or segment of a debt market.
Interest Rate Risk: In general, the price of a debt instrument falls when interest rates rise and rises when interest rates fall. Interest rate risk is generally greater for instruments with longer maturities or durations, or that do not pay current interest.
Credit Risk: The price of a debt instrument depends, in part, on the credit quality of the issuer, borrower, counterparty, or other entity responsible for payment, or underlying collateral or assets and the terms of the instrument. The price of a debt instrument can decline in response to changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions.
Below investment grade quality debt instruments (commonly referred to as "high yield securities" or "junk bonds") can involve a substantially greater risk of default or can already be in default, and their values can decline significantly. Below investment grade quality debt instruments are regarded as having predominantly speculative characteristics. Below investment grade quality debt instruments tend to be more sensitive to adverse news about the issuer, or the market or economy in general, than higher quality debt instruments.
Page 3 of 6
Prepayment/Extension Risk: Instruments subject to prepayment and/or extension can reduce the potential for gain for the instrument's holders if the instrument is prepaid and increase the potential for loss if the maturity of the instrument is extended.
Inflation-Adjusted Debt Instruments Risk: Interest payments on inflation-adjusted debt instruments can be unpredictable and vary based on the level of inflation. If inflation is negative, principal and income can both decline.
Focus Risk: Issuers in a single industry, sector, country, or region can react similarly to market, currency, political, economic, regulatory, geopolitical, environmental, public health, and other conditions, and the fund's performance will be affected by the conditions in the industries, sectors, countries, and regions to which the fund is exposed.
Foreign Risk: Exposure to foreign markets through issuers or currencies can involve additional risks relating to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These factors can make foreign investments, especially those tied economically to emerging markets or countries subject to sanctions or the threat of new or modified sanctions, more volatile and less liquid than U.S. investments. In addition, foreign markets can react differently to these conditions than the U.S. market.
Emerging Markets Risk: Investments tied economically to emerging markets, especially frontier markets, can involve additional and greater risks than the risks associated with investments in developed markets. Emerging markets can have less developed markets, greater custody and operational risk, less developed legal, regulatory, and accounting systems, greater government involvement in the economy, greater risk of new or inconsistent government treatment of or restrictions on issuers and instruments, and greater political, social, geopolitical, and economic instability than developed markets.
Currency Risk: The value of foreign currencies relative to the U.S. dollar fluctuates in response to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, and changes in currency exchange rates impact the financial condition of companies or other issuers and may change the value in U.S. dollars of investments denominated in foreign currencies.
Real Estate-Related Investment Risk: The risks of investing in real estate-related securities include certain risks associated with the direct ownership of real estate and the real estate industry in general. These include risks related to general, regional and local economic conditions; difficulties in valuing and disposing of real estate; fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulations and other governmental action; cash flow dependency; increased operating expenses; lack of availability of mortgage funds; losses due to natural disasters; overbuilding; losses due to casualty or condemnation; changes in property values and rental rates; the management skill and creditworthiness of the real estate investment trust (REIT) manager; and other factors. The securities of smaller real estate-related issuers can be more volatile and less liquid than securities of larger issuers and their issuers can have more limited financial resources.
Commodity-Related Investments Risk: The value of commodity-related investments may be more volatile than the value of equity securities or debt instruments and may be affected by factors such as changes in overall market movements, commodity index volatility, changes in interest rates, currency fluctuations, geopolitical events, or factors affecting a particular industry or commodity. The price of a commodity-related investment may be affected by demand/supply imbalances in the market for the commodity.
When-Issued, Delayed Delivery, and Forward Commitment Transaction Risk: The purchaser in a when-issued, delayed delivery or forward commitment transaction assumes the rights and risks of ownership, including the risks of price and yield fluctuations and the risk that the security will not be issued or delivered as anticipated. When-issued, delayed delivery, and forward commitment transactions can involve leverage. To be announced (TBA) transactions may significantly increase the fund's portfolio turnover rate.
Derivatives Risk: Derivatives can be highly volatile and involve risks in addition to the risks of the underlying indicator(s) on which the derivative is based. Gains or losses from derivatives can be substantially greater than the derivatives' original cost. Derivatives can involve leverage.
Leveraging Risk: Leverage involves investment exposure in an amount exceeding the initial investment. Leverage can cause increased volatility by magnifying gains or losses.
Counterparty and Third Party Risk: Transactions involving a counterparty or third party other than the issuer of the instrument are subject to the credit risk of the counterparty or third party, and to the counterparty's or third party's ability or willingness to perform in accordance with the terms of the transaction.
Liquidity Risk: It may be difficult to value, and it may not be possible to sell, certain investments, types of investments, and/or investments in certain segments of the market, and the fund may have to sell certain of these investments at prices or times that are not advantageous in order to meet redemptions or other cash needs.
Large Shareholder Risk: From time to time, shareholders of the fund (which may include institutional investors, financial intermediaries, or other MFS funds) may make relatively large redemptions or purchases of fund shares. These transactions may cause the fund to sell securities or invest additional cash, as the case may be, at disadvantageous prices. Redemptions of a large number of shares also may increase transaction and other costs or have adverse tax consequences for shareholders of the fund by requiring a sale of portfolio securities. Purchases of a large number of shares may adversely affect the fund's performance to the extent that it takes time to invest new cash and the fund maintains a larger cash position than it ordinarily would.
Performance Information
The bar chart and performance table below are intended to provide some indication of the risks of investing in the fund by showing changes in the fund's performance over time and how the fund's performance over time compares with that of (i) a broad measure of market performanceand (ii) the performance of an additional index that the advisor believes more closely reflects the market segments in which the fund invests.
The fund's past performance (before and after taxes) does not necessarily indicate how the fund will perform in the future. Updated performance is available online at mfs.com or by calling 1-800-225-2606.
Class A Bar Chart. The bar chart does not take into account any sales charges (loads) that you may be required to pay upon purchase or redemption of the fund's shares. If these sales charges were included, they would reduce the returns shown.
Page 4 of 6
The total return for the six-month period ended June 30, 2024, was 7.30%. During the period(s) shown in the bar chart, the highest quarterly return was 17.23% (for the calendar quarter ended June 30, 2020) and the lowest quarterly return was (20.14)% (for the calendar quarter ended March 31, 2020).
Performance Table.
Average Annual Total Returns |
||||||
(For the Periods Ended December 31, 2023) |
Share Class |
1 YEAR |
5 YEARS |
10 YEARS |
|||||
Returns Before Taxes |
||||||||
B Shares |
11.14% |
9.46% |
6.88% |
|||||
C Shares |
14.13% |
9.74% |
6.88% |
|||||
I Shares |
16.28% |
10.82% |
7.77% |
|||||
R1 Shares |
15.17% |
9.73% |
6.73% |
|||||
R2 Shares |
15.69% |
10.28% |
7.26% |
|||||
R3 Shares |
16.00% |
10.55% |
7.52% |
|||||
R4 Shares |
16.25% |
10.83% |
7.80% |
|||||
R6 Shares |
16.46% |
10.99% |
7.91% |
|||||
A Shares |
9.34% |
9.26% |
6.89% |
|||||
Returns After Taxes on Distributions |
||||||||
A Shares |
8.36% |
7.66% |
5.52% |
|||||
Returns After Taxes on Distributions and Sale of Fund Shares |
||||||||
A Shares |
6.00% |
6.94% |
5.12% |
|||||
Index Comparisons (Reflects no deduction for fees, expenses, or taxes) |
||||||||
Standard & Poor's 500 Stock Index |
26.29% |
15.69% |
12.03% |
|||||
MFS Lifetime 2040 Fund Blended Index |
18.75% |
11.14% |
8.00% |
As of December 31, 2023, the MFS Lifetime 2040 Fund Blended Index (the Blended Index) consisted of the following indices and weightings: 52.92% Standard & Poor's 500 Stock Index; 21.47% MSCI EAFE Index (net div); 17.25% Bloomberg U.S. Aggregate Bond Index; 4.18% Bloomberg Commodity Index; and 4.18% FTSE EPRA Nareit Developed Real Estate Index (net div). The components and weightings of the Blended Index may have differed during the periods and may differ in the future. The weightings of the Blended Index are designed to change systematically on a preset schedule and will differ over time.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your own tax situation, and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The after-tax returns are shown for only one of the fund's classes of shares, and after-tax returns for the fund's other classes of shares will vary from the returns shown.
Investment Adviser
MFS serves as the investment adviser for the fund.
Portfolio Manager(s)
Portfolio Manager |
Since |
Title |
Joseph Flaherty, Jr. |
2005 |
Chief Investment Risk Officer of MFS |
Benjamin Nastou |
2023 |
Investment Officer and Co-Director-Quantitative Solutions of MFS |
Natalie Shapiro |
2018 |
Investment Officer of MFS |
Erich Shigley |
2023 |
Investment Officer of MFS |
Joseph Flaherty, Jr., has announced his intention to retire effective June 1, 2025, and he will no longer be a portfolio manager of the fund as of that date.
Purchase and Sale of Fund Shares
You may purchase and redeem shares of the fund each day the New York Stock Exchange (the NYSE) is open for trading. You may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or through MFS Service Center, Inc. (MFSC) by overnight mail (MFSC, Suite 219341, 430 W 7th Street, Kansas City, MO 64105-1407), by mail ([Fund Name], P.O. Box 219341, Kansas City, MO 64121-9341), by telephone (1-800-225-2606), or via the Internet at mfs.com (MFS Access).
The fund's initial and subsequent investment minimums generally are as follows:
Class |
Initial Minimum |
Subsequent Minimum |
||
Class A, Class B, Class C |
None - automatic investment plans and certain asset-based fee programs $25 - employer-sponsored retirement plans $250 - Traditional and Roth IRAs $1,000 - other accounts |
$50 - by check and non-systematic written exchange request, and via MFSC telephone representatives None - other purchases |
||
Class I, Class R1, Class R2, Class R3, Class R4, Class R6 |
None |
None |
Purchases of Class B shares are closed to new and existing investors except through reinvestment of dividends and capital gain distributions. Existing investors may continue to exchange their Class B shares for the same share class of another MFS fund.
Purchases of Class R1 and Class R2 shares are closed to new eligible investors. Existing eligible investors can make additional purchases and reinvest distributions in Class R1 and Class R2 shares in any account open. Existing eligible investors may also exchange their Class R1 and Class R2 shares for the same share class of another MFS fund, open new Class R1 and Class R2 share
Page 5 of 6
accounts in other MFS funds, or transfer some or all of the shares in their account to another account and such account will be treated as an open account. Subject to the approval of the fund's Board of Trustees, the fund may in the future (i) close purchases of Class R1 and/or Class R2 shares to existing eligible investors; (ii) terminate and liquidate Class R1 and/or Class R2 shares; or (iii) convert Class R1 and/or Class R2 shares to another share class of the fund. Such actions may be undertaken without shareholder approval, but the fund expects to provide shareholders with at least 60 days' notice before taking any such action.
Taxes
If your shares are held in a taxable account, the fund's distributions will be taxed to you as ordinary income and/or capital gains. If your shares are held in a tax-advantaged account, you will generally be taxed only upon withdrawals from the account.
Payments to Broker/Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker/dealer or other financial intermediary (such as a bank), the fund, MFS, and/or MFS' affiliates may pay the financial intermediary for the sale of shares of the fund and/or the servicing of shareholder accounts. These payments may create a conflict of interest by influencing your broker/dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial intermediary or visit your financial intermediary's website for more information.
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