MFS® Research International Fund (Class R6 Shares) Second Quarter 2021 Investment Report
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MFS® Research International Fund (Class R6 Shares) Second quarter 2021 investment report NOT FDIC INSURED MAY LOSE VALUE NOT A DEPOSIT Before investing, consider the fund's investment objectives, risks, charges, and expenses. For a prospectus, or summary prospectus, containing this and other information, contact MFS or view online at mfs.com. Please read it carefully. ©2021 MFS Fund Distributors, Inc., 111 Huntington Avenue, Boston, MA 02199. FOR DEALER AND INSTITUTIONAL USE ONLY. Not to be shown, quoted, or distributed to the public. PRPEQ-RIF-30-Jun-21 34135 Table of Contents Contents Page Fund Risks 1 Disciplined Investment Approach 2 Market Overview 3 Executive Summary 4 Performance 5 Attribution 6 Significant Transactions 10 Portfolio Positioning 11 Characteristics 13 Portfolio Outlook 14 Portfolio Holdings 18 Additional Disclosures 21 Country and region information contained in this report is based upon MFS classification methodology which may differ from the methodology used by individual benchmark providers. Performance and attribution results are for the fund or share class depicted and do not reflect the impact of your contributions and withdrawals. Your personal performance results may differ. Portfolio characteristics are based on equivalent exposure, which measures how a portfolio's value would change due to price changes in an asset held either directly or, in the case of a derivative contract, indirectly. The market value of the holding may differ. 0 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund PRPEQ-RIF-30-Jun-21 Fund Risks The fund may not achieve its objective and/or you could lose money on your investment in the fund. Stock: Stock markets and investments in individual stocks are volatile and can decline significantly in response to or investor perception of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. International: Investments in foreign markets can involve greater risk and volatility than U.S. investments because of adverse market, currency, economic, industry, political, regulatory, geopolitical, or other conditions. Please see the prospectus for further information on these and other risk considerations. 1 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund 1 PRPEQ-RIF-30-Jun-21 Disciplined Investment Approach Investment objective Seekscapitalappreciation Goal OutperformtheMSCIEAFEIndex(netdiv)over full market cycles Webelievebottom-upanalysis offers thebest opportunitytotry to identifyhigh-quality companies (generally definedas sustainable, Philosophy durable franchises, significant freecashflow, solid balance sheetsand strong management teams)with above average, sustainable earnings growth potential Analyst-driven decision making process Core, multi-capitalization investment strategyallows flexibility to search Strategy for highest conviction ideas Company specificstockselection, not country specific Generally, hasbeensectorneutral relative toMSCIEAFEIndex 2 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund 2 PRPEQ-RIF-30-Jun-21 Market Overview Region performance (%) (USD) as of 30-Jun-21 Sector performance (%) (USD) as of 30-Jun-21 2Q 2021 1 Year 2Q 2021 1 Year 45.0 45.8 41.2 42.4 41.9 40.9 38.9 36.2 34.2 31.3 24.8 23.2 21.5 17.5 10.0 8.8 7.8 12.2 6.0 5.0 4.8 9.4 9.0 7.5 6.2 4.3 3.8 1.0 -0.3 -1.0 UK Japan Energy Canada Markets Emerging Emerging Health Care Health Technology Capital Goods Capital Telecom/CATV Europe ex UK ex Europe UnitedStates Pacific ex Japanex Pacific Financial Services Financial Consumer Staples Consumer Consumer Cyclicals Consumer Source: FactSet. Region performance based on MSCI regional/country indexes. Source: FactSet. Sector performance based on Global Research sector classification. The analysis of MSCI EAFE Index constituents are broken out by MFS defined sectors. Market review as of 30-Jun-21 The global equity market rally continued in Q2 of 2021, helped by the The growing debate around inflation, even if transitory, is likely to increase further reopening of economies and expanding vaccinations despite the volatility in the market as short-term investors try to switchfrom growthto spread of COVID variants around the world. value and vice versa based on near-term news. Investors’ focus has begun to shift from the post-pandemic recovery to longer-term earnings growth. 3 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund 3 PRPEQ-RIF-30-Jun-21 Executive Summary Performance results (%) R6 shares at NAV (USD) as of 30-Jun-21 Sector weights (%) as of 30-Jun-21 Portfolio Benchmark^^ Portfolio Benchmark^ Top overweights Technology 13.5 13.4 Top underweights Energy 6.2 6.7 32.35 30.29 Health Care 11.9 12.3 Capital Goods 24.4 24.6 ^^ MSCI EAFE Index The sectors described and the associated portfolio composition are based on MFS' own sector classification methodology which differs from 12.13 industry classification standards, including the standard that is 10.28 11.00 8.27 7.73 8.83 associated with the benchmark composition presented. The variance in 6.28 5.89 5.43 5.17 sector weights between the portfolio and the benchmark would be different if an industry classification standard was used. 10 year 5 year 3 year 1 year YTD 2Q 2021 The MFS Research International Fund outperformed the MSCI EAFE Index in the second quarter of 2021. Performance data shown represent past performance and are no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth Contributors Detractors more or less than the original cost; current performance may be lower or higher than quoted. • Technology – Stock selection • Energy – Stock selection For most recent month-end performance, please visit mfs.com. •Individual stocks: • Capital Goods – Stock selection Performance results reflect any applicable expense subsidies and waivers in effect during the - Novo Nordisk •Individual stocks: periods shown. Without such subsidies and waivers the fund's performance results would be less - Kyowa Kirin Co Ltd - Royal Philips Electronics NV favorable. All results assume the reinvestment of dividends and capital gains. - Asml Holding Nv (not held) Shares are available without a sales charge to eligible investors. For periods of less than one-year returns are not annualized. Source for benchmark performance SPAR, FactSet Research Systems Inc. ^ MSCI EAFE (Europe, Australasia, Far East) Index (net div) 4 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund 4 PRPEQ-RIF-30-Jun-21 Performance Results Performance results (%) R6 shares at NAV (USD) as of 30-Jun-21 Excess return vs Period Portfolio (%) Benchmark^ (%) benchmark (%) 3Q 2020 7.57 4.80 2.77 4Q 2020 12.43 16.05 -3.62 1Q 2021 2.18 3.48 -1.30 2Q 2021 5.43 5.17 0.26 2016 -0.75 1.00 -1.75 2017 28.45 25.03 3.42 2018 -13.87 -13.79 -0.08 2019 28.12 22.01 6.11 2020 13.29 7.82 5.47 2021 YTD 7.73 8.83 -1.10 10 year 6.28 5.89 0.39 5 year 12.13 10.28 1.86 3 year 11.00 8.27 2.73 1 year 30.29 32.35 -2.06 Performance data shown represent past performance and are no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. For most recent month-end performance, please visit mfs.com. Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund's performance results would be less favorable. All results assume the reinvestment of dividends and capital gains. Shares are available without a sales charge to eligible investors. For periods of less than one-year returns are not annualized. Source for benchmark performance SPAR, FactSet Research Systems Inc. ^ MSCI EAFE (Europe, Australasia, Far East) Index (net div) 5 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS Research International Fund 5 PRPEQ-RIF-30-Jun-21 Performance Drivers - Sectors Average Relative Relative to MSCI EAFE Index (USD) - second Portfolio Benchmark Sector Stock Currency relative + + = contribution quarter 2021 returns (%) returns (%) allocation1 (%) selection2 (%) effect (%) weighting (%) (%) Contributors Technology -0.2 10.2 6.2 0.0 0.5 0.0 0.5 Consumer Cyclicals -0.1 9.5 7.5 -0.0 0.2 0.0 0.2 Financial Services -0.1 4.6 3.8 -0.0 0.1 0.1 0.2 Health Care -0.3 9.9 9.4 -0.0 0.0 0.0 0.0 Telecom/CATV -0.0 -0.6 -1.0 0.0 0.0 -0.0 0.0 Detractors Energy -0.3 -2.7 1.0 0.0 -0.3 0.0 -0.2 Capital Goods -0.5 3.3 4.3 0.0 -0.3 0.0 -0.2 Consumer Staples 0.0 7.6 9.0 0.0 -0.1 -0.0 -0.1 Cash 1.5 0.0 – -0.1 – 0.0 -0.1 Total 5.6 5.4 -0.0 0.2 0.1 0.3 1 Sector allocation is calculated based upon each security's price in local currency. 2 Stock selection is calculated based upon each security's price in local currency and included interaction effect. Interaction effect is the portion of the portfolio's relative performance attributable to combining allocation decisions with stock selection decisions. This effect measures the relative strength of the manager's convictions. The interaction effect is the weight differential times the return differential. Attribution results are generated by the FactSet application utilizing a methodology that is widely accepted in the investment industry. Results are based upon daily holdings using a buy-and-hold methodology to generate individual security returns and do not include fees or expenses.