Quarterly Report
October 31, 2019
MFS® Global High Yield Fund
Portfolio of Investments
10/31/19 (unaudited)
The Portfolio of Investments is a
complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Issuer | Shares/Par | Value ($) | ||
| Bonds – 33.1% | ||||
| Apparel Manufacturers – 0.3% | ||||
| PVH Corp., 3.125%, 12/15/2027 | EUR | 720,000 | $892,482 | |
| Asset-Backed & Securitized – 0.0% | ||||
| Lehman Brothers Commercial Conduit Mortgage Trust, 0.949%, 2/18/2030 (i) | $ | 22,293 | $0 | |
| Automotive – 0.6% | ||||
| LKQ European Holdings B.V., 3.625%, 4/01/2026 (n) | EUR | 350,000 | $406,457 | |
| LKQ Italia Bondco S.p.A., 3.875%, 4/01/2024 | 1,155,000 | 1,441,142 | ||
| $1,847,599 | ||||
| Broadcasting – 0.9% | ||||
| Arqiva Broadcast Finance PLC, 6.75%, 9/30/2023 | GBP | 1,200,000 | $1,665,172 | |
| Pinewood Finance Co. Ltd., 3.25%, 9/30/2025 (z) | 605,000 | 801,320 | ||
| WMG Acquisition Corp., 4.125%, 11/01/2024 | EUR | 495,000 | 568,731 | |
| $3,035,223 | ||||
| Brokerage & Asset Managers – 0.3% | ||||
| Vivion Investments S.à r.l., 3%, 8/08/2024 | EUR | 1,000,000 | $1,110,281 | |
| Building – 0.4% | ||||
| Grupo Cementos de Chihuahua S.A.B. de C.V., 5.25%, 6/23/2024 (n) | $ | 1,355,000 | $1,405,826 | |
| Cable TV – 2.2% | ||||
| Altice Financing S.A., 7.5%, 5/15/2026 (n) | $ | 525,000 | $557,813 | |
| Telenet Finance Luxembourg Notes S.à r.l., 3.5%, 3/01/2028 | EUR | 500,000 | 606,382 | |
| Telesat Holdings, Inc., 6.5%, 10/15/2027 (z) | $ | 225,000 | 234,911 | |
| Videotron Ltd., 5.375%, 6/15/2024 (n) | 1,590,000 | 1,727,137 | ||
| Virgin Media Secured Finance PLC, 5%, 4/15/2027 | GBP | 875,000 | 1,193,188 | |
| VTR Finance B.V., 6.875%, 1/15/2024 (n) | $ | 1,456,000 | 1,492,400 | |
| Ziggo B.V. , 2.875%, 1/15/2030 (z) | EUR | 960,000 | 1,085,410 | |
| Ziggo Bond Finance B.V., 5.875%, 1/15/2025 (n) | $ | 265,000 | 272,950 | |
| $7,170,191 | ||||
| Chemicals – 1.1% | ||||
| Consolidated Energy Finance S.A., 6.875%, 6/15/2025 (n) | $ | 1,244,000 | $1,206,680 | |
| SPCM S.A., 2.875%, 6/15/2023 | EUR | 1,367,000 | 1,533,992 | |
| Starfruit U.S. Holding Co. LLC/Starfruit Finance B.V. , 6.5%, 10/01/2026 | 580,000 | 652,534 | ||
| $3,393,206 | ||||
| Conglomerates – 0.5% | ||||
| Grupo KUO S.A.B. de C.V., 5.75%, 7/07/2027 (n) | $ | 1,555,000 | $1,601,650 | |
| Construction – 0.2% | ||||
| Mattamy Group Corp., 6.5%, 10/01/2025 (n) | $ | 515,000 | $544,613 | |
| Consumer Products – 0.3% | ||||
| Coty, Inc., 4.75%, 4/15/2026 | EUR | 470,000 | $535,844 | |
| Energizer Gamma Acquisition B.V. , 4.625%, 7/15/2026 | 495,000 | 582,099 | ||
| $1,117,943 | ||||
| Containers – 0.6% | ||||
| ARD Finance S.A., 6.625%, 9/15/2023 | EUR | 160,000 | $184,702 | |
| San Miguel Industrias PET S.A., 4.5%, 9/18/2022 (n) | $ | 1,359,000 | 1,388,015 | |
| Trivium Packaging Finance B.V., 3.75%, 8/15/2026 (z) | EUR | 210,000 | 243,310 | |
| $1,816,027 | ||||
1
Portfolio of Investments (unaudited) –
continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Emerging Market Quasi-Sovereign – 3.2% | ||||
| CEMIG Geracao e Transmissao S.A. (Federative Republic of Brazil), 9.25%, 12/05/2024 (n) | $ | 1,450,000 | $1,690,714 | |
| Eskom Holdings SOC Ltd. (Republic of South Africa), 6.35%, 8/10/2028 (n) | 1,200,000 | 1,269,310 | ||
| Greenko Dutch B.V., 5.25%, 7/24/2024 (n) | 700,000 | 705,082 | ||
| Petrobras Global Finance B.V. (Federative Republic of Brazil), 5.75%, 2/01/2029 | 3,908,000 | 4,349,018 | ||
| Petroleos Mexicanos, 6.49%, 1/23/2027 (n) | 810,000 | 864,675 | ||
| Southern Gas Corridor CJSC (Republic of Azerbaijan), 6.875%, 3/24/2026 (n) | 1,272,000 | 1,481,880 | ||
| $10,360,679 | ||||
| Emerging Market Sovereign – 2.4% | ||||
| Arab Republic of Egypt, 5.577%, 2/21/2023 | $ | 1,055,000 | $1,081,244 | |
| Dominican Republic, 5.5%, 1/27/2025 | 1,055,000 | 1,124,904 | ||
| Federal Republic of Nigeria, 7.625%, 11/21/2025 (n) | 1,023,000 | 1,113,751 | ||
| Government of Ukraine, 7.75%, 9/01/2024 | 1,258,000 | 1,347,633 | ||
| Republic of Argentina, 5.875%, 1/11/2028 | 1,833,000 | 696,558 | ||
| Republic of South Africa, 4.875%, 4/14/2026 | 1,385,000 | 1,427,766 | ||
| Republic of Turkey, 5.75%, 3/22/2024 | 942,000 | 949,031 | ||
| $7,740,887 | ||||
| Energy - Independent – 0.0% | ||||
| Afren PLC, 11.5%, 2/01/2016 (a)(d)(z) | $ | 1,000,000 | $820 | |
| Afren PLC, 6.625%, 12/09/2020 (a)(d)(z) | 528,000 | 211 | ||
| $1,031 | ||||
| Entertainment – 0.1% | ||||
| Motion Bondco DAC, 4.5%, 11/15/2027 (z) | EUR | 420,000 | $470,365 | |
| Financial Institutions – 1.8% | ||||
| AnaCap Financial Europe S.A. SICAV-RAIF, FLR, 5% (EURIBOR - 3mo. + 5%), 8/01/2024 | EUR | 1,235,000 | $1,226,571 | |
| Arrow Global Finance PLC, 5.125%, 9/15/2024 | GBP | 990,000 | 1,281,653 | |
| Cabot Financial (Luxembourg) S.A. , 7.5%, 10/01/2023 | 840,000 | 1,126,177 | ||
| Garfunkelux Holdco 3 S.A., 7.5%, 8/01/2022 | EUR | 545,000 | 574,339 | |
| Intertrust Group B.V., 3.375%, 11/15/2025 | 840,000 | 980,322 | ||
| Promontoria Holding 264 B.V., 6.75%, 8/15/2023 | 640,000 | 651,406 | ||
| $5,840,468 | ||||
| Food & Beverages – 2.0% | ||||
| BRF S.A., 4.875%, 1/24/2030 (n) | $ | 857,000 | $854,772 | |
| Central American Bottling Corp., 5.75%, 1/31/2027 (n) | 1,775,000 | 1,872,643 | ||
| Cott Holdings, Inc., 5.5%, 4/01/2025 (n) | 570,000 | 594,225 | ||
| JBS Investments II GmbH, 5.75%, 1/15/2028 (n) | 1,200,000 | 1,250,400 | ||
| NBM U.S. Holdings, Inc., 7%, 5/14/2026 (n) | 1,265,000 | 1,341,532 | ||
| Picard Bondco , 5.5%, 11/30/2024 | EUR | 595,000 | 637,059 | |
| $6,550,631 | ||||
| Gaming & Lodging – 0.3% | ||||
| Scientific Games International, Inc., 5.5%, 2/15/2026 | EUR | 770,000 | $837,260 | |
| Industrial – 1.1% | ||||
| Bilfinger SE, 4.5%, 6/14/2024 | EUR | 900,000 | $1,075,319 | |
| Blitz F18-674 GmbH, 6%, 7/30/2026 | 1,100,000 | 1,330,865 | ||
| Dar Al-Arkan Sukuk Co. Ltd., 6.875%, 3/21/2023 | $ | 670,000 | 659,939 | |
| GEMS Menasa Cayman Ltd./GEMS Education Delaware LLC, 7.125%, 7/31/2026 (n) | 615,000 | 637,294 | ||
| $3,703,417 | ||||
| International Market Quasi-Sovereign – 0.5% | ||||
| Electricite de France S.A., 5.375% to 1/29/2025, FLR (EUR Swap Rate-5yr. + 3.794%) to 1/29/2045, (EUR Swap Rate - 5yr. + 4.544%) to 12/31/2164 | EUR | 1,200,000 | $1,534,216 | |
2
Portfolio of Investments (unaudited) –
continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Major Banks – 1.1% | ||||
| Barclays PLC, 8% to 12/15/2020, FLR (EUR Swap Rate - 5yr. + 6.75%) to 12/31/2049 | EUR | 1,645,000 | $1,963,337 | |
| Sovcombank PJSC via SovCom Capital D.A.C., 8%, 4/07/2030 (n) | $ | 650,000 | 673,862 | |
| UBS Group AG, 6.875% to 8/07/2025, FLR (Swap Rate - 5yr. + 4.59%) to 12/29/2049 | 910,000 | 985,985 | ||
| $3,623,184 | ||||
| Medical & Health Technology & Services – 0.2% | ||||
| IQVIA Holdings, Inc., 3.25%, 3/15/2025 | EUR | 645,000 | $735,534 | |
| Metals & Mining – 0.7% | ||||
| Baffinland Iron Mines Corp./Baffinland Iron Mines LP, 8.75%, 7/15/2026 (n) | $ | 140,000 | $140,000 | |
| KME AG, 6.75%, 2/01/2023 | EUR | 425,000 | 393,422 | |
| Northwest Acquisitions ULC/Dominion Finco, Inc., 7.125%, 11/01/2022 (n) | $ | 390,000 | 195,000 | |
| Petra Diamonds U.S. Treasury PLC, 7.25%, 5/01/2022 (n) | 670,000 | 469,000 | ||
| Vale S.A., 6.25%, 8/10/2026 | 845,000 | 984,594 | ||
| $2,182,016 | ||||
| Midstream – 0.9% | ||||
| AI Candelaria Spain SLU, 7.5%, 12/15/2028 (n) | $ | 1,052,000 | $1,186,130 | |
| Puma International Financing S.A., 5%, 1/24/2026 | 635,000 | 607,956 | ||
| Star Energy Geothermal (Wayang Windu) Ltd., 6.75%, 4/24/2033 (n) | 1,104,000 | 1,170,585 | ||
| $2,964,671 | ||||
| Network & Telecom – 0.4% | ||||
| Telecom Italia S.p.A./Milano, 2.375%, 10/12/2027 | EUR | 1,075,000 | $1,233,384 | |
| Oil Services – 0.4% | ||||
| MV24 Capital B.V., 6.748%, 6/01/2034 (n) | $ | 1,300,000 | $1,359,150 | |
| Other Banks & Diversified Financials – 0.6% | ||||
| BBVA Bancomer S.A./Texas, 5.875%, 9/13/2034 (n) | $ | 860,000 | $873,760 | |
| Kazkommertsbank JSC, 5.5%, 12/21/2022 | 1,025,675 | 1,033,252 | ||
| $1,907,012 | ||||
| Pharmaceuticals – 0.9% | ||||
| Grifols S.A., 3.2%, 5/01/2025 | EUR | 1,680,000 | $1,913,670 | |
| Rossini S.à r.l., 6.75%, 10/30/2025 | 723,000 | 891,272 | ||
| $2,804,942 | ||||
| Pollution Control – 0.5% | ||||
| Aegea Finance S.à r.l., 5.75%, 10/10/2024 (n) | $ | 1,504,000 | $1,582,975 | |
| Restaurants – 0.4% | ||||
| Stonegate Pub Co. Financing PLC, 4.875%, 3/15/2022 | GBP | 1,085,000 | $1,434,306 | |
| Retailers – 0.9% | ||||
| AA Bond Co. Ltd., 2.75%, 7/31/2023 | GBP | 730,000 | $880,292 | |
| Dufry Finance S.C.A., 4.5%, 8/01/2023 | EUR | 1,080,000 | 1,234,637 | |
| EG Global Finance PLC, 4.375%, 2/07/2025 | 420,000 | 455,361 | ||
| Takko Luxembourg 2 S.C.A., 5.375%, 11/15/2023 | 430,000 | 443,433 | ||
| $3,013,723 | ||||
| Supermarkets – 0.5% | ||||
| Eurotorg LLC Via Bonitron DAC, 8.75%, 10/30/2022 (n) | $ | 1,547,000 | $1,663,025 | |
| Telecommunications - Wireless – 1.4% | ||||
| Altice France S.A., 8.125%, 2/01/2027 (n) | $ | 405,000 | $449,044 | |
| Altice France S.A./France, 3.375%, 1/15/2028 (z) | EUR | 430,000 | 480,466 | |
| Altice Luxembourg S.A., 6.25%, 2/15/2025 | 425,000 | 492,357 | ||
3
Portfolio of Investments (unaudited) –
continued
| Issuer | Shares/Par | Value ($) | ||
| Bonds – continued | ||||
| Telecommunications - Wireless – continued | ||||
| Cable Onda S.A., 4.5%, 1/30/2030 (z) | $ | 550,000 | $557,298 | |
| Digicel International Finance Ltd., 8.75%, 5/25/2024 (n) | 455,000 | 431,113 | ||
| Millicom International Cellular S.A., 5.125%, 1/15/2028 (n) | 1,486,000 | 1,530,580 | ||
| SFR Group S.A., 7.375%, 5/01/2026 (n) | 420,000 | 449,755 | ||
| $4,390,613 | ||||
| Transportation - Services – 2.2% | ||||
| Aeropuertos Dominicanos Siglo XXI S.A., 6.75%, 3/30/2029 | $ | 1,057,000 | $1,123,063 | |
| GMR Hyderabad International Airport Ltd., 4.25%, 10/27/2027 | 1,055,000 | 985,756 | ||
| Heathrow Finance PLC, 3.875%, 3/01/2027 | GBP | 1,440,000 | 1,869,967 | |
| Navios South American Logistics, Inc., 7.25%, 5/01/2022 | $ | 335,000 | 329,975 | |
| Navios South American Logistics, Inc./Navios Logistics Finance (U.S.), Inc., 7.25%, 5/01/2022 (n) | 580,000 | 571,300 | ||
| Rumo Luxembourg S.à r.l., 5.875%, 1/18/2025 (n) | 363,000 | 384,780 | ||
| Rumo Luxembourg S.à r.l., “A”, 7.375%, 2/09/2024 (n) | 1,580,000 | 1,704,504 | ||
| $6,969,345 | ||||
| Utilities - Electric Power – 3.2% | ||||
| Adani Green Energy (UP) Ltd./Prayatna Developers Private Ltd., 6.25%, 12/10/2024 (n) | $ | 1,161,000 | $1,230,706 | |
| Azure Power Energy Ltd., 5.5%, 11/03/2022 (n) | 1,250,000 | 1,263,987 | ||
| Azure Power Solar Energy Private Ltd., 5.65%, 12/24/2024 (n) | 502,000 | 504,008 | ||
| Drax Finco PLC, 6.625%, 11/01/2025 (n) | 590,000 | 624,663 | ||
| Empresa Electrica Cochrane S.p.A., 5.5%, 5/14/2027 (z) | 471,000 | 485,719 | ||
| Genneia S.A., 8.75%, 1/20/2022 (n) | 736,000 | 496,800 | ||
| Genneia S.A., 8.75%, 1/20/2022 | 364,000 | 245,700 | ||
| Inkia Energy Ltd., 5.875%, 11/09/2027 (n) | 1,249,000 | 1,294,289 | ||
| Listrindo Capital B.V., 4.95%, 9/14/2026 | 1,355,000 | 1,373,631 | ||
| LLPL Capital Pte. Ltd., 6.875%, 2/04/2039 (n) | 326,106 | 381,153 | ||
| Mong Duong Finance Holdings B.V., 5.125%, 5/07/2029 (n) | 665,000 | 676,302 | ||
| Stoneway Capital Corp., 10%, 3/01/2027 (n) | 1,542,685 | 786,785 | ||
| TerraForm Global Operating LLC, 6.125%, 3/01/2026 (n) | 886,000 | 905,935 | ||
| $10,269,678 | ||||
| Total Bonds | $107,107,553 | |||
| Common Stocks – 0.2% | ||||
| Construction – 0.1% | ||||
| ICA Tenedora S.A. de C.V. (a) | 253,322 | $447,357 | ||
| Energy - Independent – 0.1% | ||||
| Frontera Energy Corp. | 26,510 | $211,285 | ||
| Total Common Stocks | $658,642 | |||
| Investment Companies (h) – 67.0% | ||||
| Bond Funds – 64.6% | ||||
| MFS High Yield Pooled Portfolio (v) | 22,602,844 | $209,528,360 | ||
| Money Market Funds – 2.4% | ||||
| MFS Institutional Money Market Portfolio, 1.89% (v) | 7,705,092 | $7,705,863 | ||
| Total Investment Companies | $217,234,223 | |||
| Other Assets, Less Liabilities – (0.3)% | (990,747) | |||
| Net Assets – 100.0% | $324,009,671 | |||
| (a) | Non-income producing security. |
| (d) | In default. |
| (h) | An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $217,234,223 and $107,766,195, respectively. |
4
Portfolio of Investments (unaudited) –
continued
| (i) | Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security. |
| (n) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $47,279,010, representing 14.6% of net assets. |
| (v) | Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end. |
| (z) | Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The fund holds the following restricted securities: |
| Restricted Securities | Acquisition Date | Cost | Value |
| Afren PLC, 11.5%, 2/01/2016 | 11/20/2015 | $986,320 | $820 |
| Afren PLC, 6.625%, 12/09/2020 | 11/20/2015 | 515,241 | 211 |
| Altice France S.A./France, 3.375%, 1/15/2028 | 9/13/2019 | 476,289 | 480,466 |
| Cable Onda S.A., 4.5%, 1/30/2030 | 10/28/2019 | 544,473 | 557,298 |
| Empresa Electrica Cochrane S.p.A., 5.5%, 5/14/2027 | 10/30/2019 | 470,991 | 485,719 |
| Motion Bondco DAC, 4.5%, 11/15/2027 | 10/16/2019-10/17/2019 | 470,894 | 470,365 |
| Pinewood Finance Co. Ltd., 3.25%, 9/30/2025 | 9/11/2019-9/13/2019 | 766,458 | 801,320 |
| Telesat Holdings, Inc., 6.5%, 10/15/2027 | 9/27/2019-9/30/2019 | 227,145 | 234,911 |
| Trivium Packaging Finance B.V., 3.75%, 8/15/2026 | 7/19/2019 | 235,589 | 243,310 |
| Ziggo B.V. , 2.875%, 1/15/2030 | 10/17/2019-10/18/2019 | 1,074,175 | 1,085,410 |
| Total Restricted Securities | $4,359,830 | ||
| % of Net assets | 1.3% |
| The following abbreviations are used in this report and are defined: | |
| EURIBOR | Euro Interbank Offered Rate |
| FLR | Floating Rate. Interest rate resets periodically based on the parenthetically disclosed reference rate plus a spread (if any). The period-end rate reported may not be the current rate. All reference rates are USD unless otherwise noted. |
| Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below: | |
| EUR | Euro |
| GBP | British Pound |
| Derivative Contracts at 10/31/19 | ||||||
| Forward Foreign Currency Exchange Contracts | ||||||
| Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||
| Asset Derivatives | ||||||
| EUR | 742,720 | USD | 822,914 | UBS AG | 12/13/2019 | $7,700 |
| USD | 1,078,971 | EUR | 964,085 | Citibank N.A. | 12/13/2019 | 796 |
| $8,496 | ||||||
| Liability Derivatives | ||||||
| USD | 462,116 | EUR | 413,915 | Deutsche Bank AG | 12/13/2019 | $(783) |
| USD | 30,715,598 | EUR | 27,908,555 | Merrill Lynch International | 12/13/2019 | (495,670) |
| USD | 473,612 | EUR | 424,200 | Morgan Stanley Capital Services, Inc. | 12/13/2019 | (788) |
| USD | 9,844,369 | GBP | 8,037,480 | Deutsche Bank AG | 12/13/2019 | (580,779) |
| $(1,078,020) | ||||||
5
Portfolio of Investments (unaudited) –
continued
| Futures Contracts | ||||||
| Description | Long/ Short | Currency | Contracts | Notional Amount | Expiration Date | Value/Unrealized Appreciation (Depreciation) |
| Asset Derivatives | ||||||
| Interest Rate Futures | ||||||
| U.S. Treasury Note 10 yr | Short | USD | 49 | $6,384,547 | December – 2019 | $76,720 |
At October 31, 2019, the fund had
cash collateral of $63,700 to cover any collateral or margin obligations for certain derivative contracts.
See attached supplemental
information. For more information see notes to financial statements as disclosed in the most recent semiannual or annual report.
6
Supplemental Information
10/31/19 (unaudited)
The fund is an investment company
and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services - Investment
Companies.
(1) Investment Valuations
The investments of the fund and the
MFS High Yield Pooled Portfolio are valued as described below.
Equity securities, including
restricted equity securities, are generally valued at the last sale or official closing price on their primary market or exchange as provided by a third-party pricing service. Equity securities, for which there were
no sales reported that day, are generally valued at the last quoted daily bid quotation on their primary market or exchange as provided by a third-party pricing service. Debt instruments and floating rate loans,
including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less
may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price on their primary exchange as provided by a third-party pricing service.
Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation on their primary exchange as provided by a third-party pricing
service. Forward foreign currency exchange contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate
time periods. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service
may also be valued at a broker/dealer bid quotation. In determining values, third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity,
type of issue, trading characteristics, and other market data. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of
bid and asked prices for rates provided by a third-party pricing service.
The Board of Trustees has delegated
primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the
Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the
oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and
many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines
that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior
to the determination of the fund’s net asset value, or after the halt of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is
principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost
and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an
investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an
investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an
investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.
Various inputs are used in
determining the value of the fund's assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value
hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund's assessment of the significance of a
particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or
liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk).
7
Supplemental Information (unaudited) –
continued
Level 3 includes unobservable inputs, which may
include the adviser's own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments, such as futures contracts and forward foreign currency exchange contracts.
The following is a summary of the levels used as of October 31, 2019 in valuing the fund's assets or liabilities:
| Financial Instruments | Level 1 | Level 2 | Level 3 | Total |
| Equity Securities: | ||||
| Mexico | $— | $447,357 | $— | $447,357 |
| Canada | 211,285 | — | — | 211,285 |
| Non - U.S. Sovereign Debt | — | 19,635,782 | — | 19,635,782 |
| U.S. Corporate Bonds | — | 7,444,949 | — | 7,444,949 |
| Commercial Mortgage-Backed Securities | — | 0 | — | 0 |
| Foreign Bonds | — | 80,026,822 | — | 80,026,822 |
| Mutual Funds | 217,234,223 | — | — | 217,234,223 |
| Total | $217,445,508 | $107,554,910 | $— | $325,000,418 |
| Other Financial Instruments | ||||
| Futures Contracts - Assets | $76,720 | $— | $— | $76,720 |
| Forward Foreign Currency Exchange Contracts – Assets | — | 8,496 | — | 8,496 |
| Forward Foreign Currency Exchange Contracts – Liabilities | — | (1,078,020) | — | (1,078,020) |
For further information regarding
security characteristics, see the Portfolio of Investments. Please refer to the MFS High Yield Pooled Portfolio's shareholder report for further information regarding the levels used in valuing its assets or
liabilities.
(2) Investments in Affiliated
Issuers
An affiliated issuer may be
considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the following were affiliated issuers:
| Affiliated Issuers | Beginning Value | Purchases | Sales Proceeds | Realized Gain (Loss) | Change in Unrealized Appreciation or Depreciation | Ending Value |
| MFS High Yield Pooled Portfolio | $204,178,389 | $25,576,807 | $27,467,265 | $(3,039,776) | $10,280,205 | $209,528,360 |
| MFS Institutional Money Market Portfolio | 9,716,557 | 56,027,752 | 58,039,465 | 92 | 927 | 7,705,863 |
| $213,894,946 | $81,604,559 | $85,506,730 | $(3,039,684) | $10,281,132 | $217,234,223 |
| Affiliated Issuers | Dividend Income | Capital Gain Distributions |
| MFS High Yield Pooled Portfolio | $8,672,259 | $— |
| MFS Institutional Money Market Portfolio | 183,410 | — |
| $8,855,669 | $— |
(3) Issuer Country
Weightings
Issuer country weighting percentages
of portfolio holdings based on net assets, as of October 31, 2019, are as follows:
| United States | 59.2% |
| United Kingdom | 5.4% |
| Brazil | 4.8% |
| Canada | 3.8% |
| Luxembourg | 2.6% |
| France | 2.3% |
| Netherlands | 2.1% |
| Mexico | 1.7% |
| India | 1.5% |
| Other Countries | 16.6% |
These issuer country weighting
percentages include both accrued interest amounts and the equivalent exposure from any derivative holdings, if applicable. Percentages reflect exposure to the underlying fund holdings including cash & cash
equivalents.
8