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2021 Capital Gain Estimates
November 4, 2021
The following are preliminary estimates of capital gain distributions scheduled to be paid before the end of 2021.
P lease note that any ordinary income dividends that the fund may pay are not included in these estimates. These estimates only provide estimates of capital gain distributions.
Actual distributions will be affected by a number of factors: These estimates are computed through part of the year and do not reflect the full measurement period. Portfolio trading over the next several weeks may affect the estimates; remember that these are actively managed funds. Significant market movement and/or subscription/redemption activity can have a significant impact on these estimates. These estimates do not reflect all required tax adjustments. Actual capital gain distributions will be affected by all required tax adjustments and may be substantially different from these estimates. Because these are estimates, some of these funds may pay capital gains above or below these estimated ranges, and funds not currently expected to pay capital gains could be required to do so.
MFS provides these estimates for informational purposes. Please remember that they are based on preliminary information and are subject to change. These capital gain estimates are not intended or written to be used as tax advice. Because each investor’s tax situation is unique, you should consult your tax professional about the federal, state, local, or foreign tax consequences of this information.
P lease refer to the Q&A that follows this table for additional information on capital gain distributions and how they ar e calculated.
All funds computed through September 30, 2021.
Capital Gain Estimates as of September 30, 202 1 (as a % of average NAV)
Fund Name Short-Term^ Long-Term Total
Record Date
Ex Date
P ayable Date Massachusetts Investors Growth Stock Fund 0% - 1% 6% - 9% 6% - 10% 12/13 12/14 12/ Massachusetts Investors Trust 0% - 1% 4% - 6% 4% - 7% 12/13 12/14 12/ MFS ®^ Aggressive Growth Allocation Fund 0% - 1% 3% - 4% 3% - 5% 12/27 12/28 12/ MFS ®^ Alabama Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/ MFS ®^ Arkansas Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/ MFS ®^ Blended Research ®^ Core Equity Fund 4% - 5% 9% - 11% 13% - 16% 12/13 12/14 12/ MFS®^ Blended Research®^ Emerging Markets Equity Fund (^) 0% - 1% 1% - 2% 1% - 3% 12/13 12/14 12/ MFS ®^ Blended Research ®^ Growth Equity Fund 5% - 6% 7% - 9% 12% - 15% 12/13 12/14 12/ MFS ®^ Blended Research ®^ International Equity Fund 2% - 3% 1% - 2% 3% - 5% 12/13 12/14 12/ MFS ®^ Blended Research ®^ Mid Cap Equity Fund 5% - 6% (^) 11% - 12% 16% - 18% 12/13 12/14 12/ MFS ®^ Blended Research ®^ Small Cap Equity Fund 3% - 4% 7% - 8% 10% - 12% 12/13 12/14 12/ MFS ®^ Blended Research ®^ Value Equity Fund 2% - 3% 6% - 7% 8% - 10% 12/13 12/14 12/ MFS ®^ California Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/ MFS ®^ Commodity Strategy Fund 0% 0% 0% 12/8 12/9 12/ MFS ®^ Conservative Allocation Fund 0% - 1% 0% - 1% 0% - 2% 12/27 12/28 12/ MFS ®^ Core Equity Fund 2% - 4% 4% - 6% 6% - 10% 12/6 12/7 12/ MFS ®^ Corporate Bond Fund 0% - 1% 2% - 3% 2% - 4% 12/6 12/7 12/ MFS ®^ Diversified Income Fund 0% - 1% 1% - 2% 1% - 3% 12/15 12/16 12/
(as a % of average NAV)
Fund Name Short-Term^ Long-Term Total Record Date Ex Date P ayable
- Capital Gain Estimates as of September 30,
- MFS ® Emerging Markets Debt Fund 0% 0% 0% 12/15 12/16 12/ Date
- MFS ® Emerging Markets Debt Local Currency Fund 0% 0% 0% 12/15 12/16 12/
- MFS ® Emerging Markets Equity Fund 0% 0% 0% 12/8 12/9 12/
- MFS ® Emerging Markets Equity Research Fund 0% - 1% 0% 0% - 1% 12/8 12/9 12/
- MFS ® Equity Income Fund 1% - 2% 5% - 6% 6% - 8% 12/15 12/16 12/
- MFS ® Georgia Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/
- MFS ® Global Alternative Strategy Fund 0% 0% 0% 12/13 12/14 12/
- MFS ® Global Equity Fund 0% - 1% 4% - 6% 4% - 7% 12/8 12/9 12/
- MFS ® Global Growth Fund 0% - 1% 4% - 6% 4% - 7% 12/8 12/9 12/
- MFS ® Global High Yield Fund 0% 0% 0% 12/15 12/16 12/
- MFS ® Global New Discovery Fund 2% - 3% 3% - 4% 5% - 7% 12/6 12/7 12/
- MFS® Global Opportunistic Bond Fund 0% - 1% 1% - 2% 1% - 3% 12/15 12/16 12/
- MFS ® Global Real Estate Fund 0% - 1% 0% - 1% 0% - 2% 12/13 12/14 12/
- MFS ® Global Total Return Fund 0% - 1% 6% - 7% 6% - 8% 12/15 12/16 12/
- MFS ® Government Securities Fund 0% 0% 0% 12/6 12/7 12/
- MFS ® Growth Allocation Fund 0% - 1% 3% - 4% 3% - 5% 12/27 12/28 12/
- MFS ® Growth Fund 0% 2% - 4% 2% - 4% 12/13 12/14 12/
- MFS ® High Income Fund 0% 0% 0% 12/6 12/7 12/
- MFS ® Income Fund 0% - 1% 0% - 1% 0% - 2% 12/15 12/16 12/
- MFS ® Inflation-Adjusted Bond Fund 0% - 1% 0% - 1% 0% - 2% 12/15 12/16 12/
- MFS ® International DiversificationSM Fund 0% - 1% 0% - 1% 0% - 2% 12/27 12/28 12/
- MFS ® International Growth Fund 0% - 2% 3% - 5% 3% - 7% 12/8 12/9 12/
- MFS ® International Intrinsic Value Fund 1 0% - 1% 5% - 6% 5% - 7% 12/8 12/9 12/
- MFS ® International Large Cap Value Fund 1% - 2% 0% - 1% 1% - 3% 12/6 12/7 12/
- MFS ® International New Discovery Fund 2 0% - 1% 2% - 3% 2% - 4% 12/6 12/7 12/
- MFS ® Lifetime® 2020 Fund 0% - 1% 4% - 5% 4% - 6% 12/27 12/28 12/
- MFS ® Lifetime® 2025 Fund 0% - 1% 2% - 3% 2% - 4% 12/27 12/28 12/
- MFS ® Lifetime® 2030 Fund 0% - 1% 3% - 4% 3% - 5% 12/27 12/28 12/
- MFS ® Lifetime® 2035 Fund 0% - 1% 2% - 3% 2% - 4% 12/27 12/28 12/
- MFS ® Lifetime® 2040 Fund 0% - 1% 3% - 4% 3% - 5% 12/27 12/28 12/
- MFS ® Lifetime® 2045 Fund 1% - 2% 2% - 3% 3% - 5% 12/27 12/28 12/
- MFS ® Lifetime® 2050 Fund 1% - 2% 2% - 3% 3% - 5% 12/27 12/28 12/
- MFS ® Lifetime® 2055 Fund 1% - 2% 1% - 2% 2% - 4% 12/27 12/28 12/
- MFS ® Lifetime® 2060 Fund 0% - 1% 0% - 1% 0% - 2% 12/27 12/28 12/
- MFS ® Lifetime® 2065 Fund 0% 0% 0% 12/27 12/28 12/
- MFS ® Lifetime® Income Fund 0% - 1% 1% - 3% 1% - 4% 12/27 12/28 12/
- MFS ® Limited Maturity Fund 0% 0% 0% 12/6 12/7 12/
- MFS ® Low Volatility Equity Fund 0% 3% - 4% 3% - 4% 12/15 12/16 12/
- MFS ® Low Volatility Global Equity Fund 0% 6% - 7% 6% - 7% 12/15 12/16 12/
- MFS ® Managed Wealth Fund 0% 0% 0% 12/27 12/28 12/
- MFS ® Maryland Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/
- MFS ® Massachusetts Municipal Bond Fund 0% 0% 0% 12/6 12/7 12/
Q&A: 2021 Capital Gain Distributions
This information is intended to help you understand capital gain distributions and how they are calculated.
Q: Why are capital gain distributions made to shareholders? A: As long as certain conditions imposed by the IRS are met, a mutual fund is not subject to income taxes on income, such as interest and dividends, that it earns from portfolio holdings or on the capital gains that are realized when a portfolio manager sells securities in the portfolio. The reason for this is that a mutual fund is a conduit through which its income and capital gains flow to its shareholders in the form of distributions. The distributions are then subject to tax when they are paid to the shareholders. These distributions are included in a shareholder’s income tax return. According to IRS rules, a mutual fund must distribute 98% of its calendar- year income and 98.2% of its capital gains realized from November 1 of the previous year to October 31 of the current year. If it fails to meet these minimum distribution requirements, the fund is subject to a 4% excise tax on any undistributed amounts.
Q: What determines the amount of the capital gains to be distributed? A: The capital gain distribution is generally based on the capital gains the fund realizes from November 1 of the previous year to October 31 of the current year. This period may not correspond with the fund’s fiscal year. If it does not, a comparison will be made of the capital gains realized during the fiscal year with those realized during the excise tax measurement period. Generally, the higher of the two amounts will be distributed.
Q: What other factors could affect the estimated capital gains? A: Additional trading or shareholder activity through October 31, 2021, and tax adjustments could further affect the estimates.
Q: Why aren't estimates of ordinary income distributions provided by MFS? A: As described above, IRS rules require mutual funds to distribute 98% of their calendar year income, and calendar year income for certain funds can be highly volatile based on factors including: trading activity, investor purchases and sales, and tax adjustments. The volatility of calendar year income prevents the calculation of reasonably accurate estimates of ordinary income distributions.
Q: How do a fund’s realized capital gains relate to current market conditions? A: Just because securities markets may be up or down does not mean that a fund will have more or less in realized capital gains. A fund may distribute a capital gain during a bear market and, conversely, it may not distribute a large capital gain during a bull market. A fund must pay a capital gain distribution if at the end of its fiscal year it has a net gain from the sales of securities. Capital gain/loss is the difference between the price at which each security is purchased and the price at which it is subsequently sold. If it is sold for more than its cost, there is a gain. If it is sold for less than its cost, there is a loss. Losses from the sales of securities may be used to offset gains realized from the sale of other securities. However, if at the end of its fiscal year the fund is in a net gain position, the amount of net capital gains must be distributed to shareholders.
Although a capital gain is a taxable event, it is important to remember that it occurs because the fund makes a profit on an investment. That profit is included in the price per share and in the value of the account until it is distributed in additional shares or as a cash distribution. This is why you often see a fund’s price per share drop when it distributes capital gains. Unless a shareholder receives a capital gain distribution in cash, the value of the shareholder’s account is not affected by a capital gain distribution.
Q: Why might the portfolio manager not try to reduce gains by realizing losses? A: Although losses realized as a result of trading do offset gains, decisions about buying and selling securities are made on the basis of whether or not we believe the security remains a good investment for the fund. We will not sell a security simply to realize a loss. When we decide to sell a security, we try to do so in the most tax-advantageous manner. The decision to sell, however, is based on the portfolio manager’s analysis of that security’s prospects as an investment, not on how its sale will affect the fund’s overall gains or losses. Our focus is on the long-term performance of the fund for our shareholders.
MFS Fund Distributors, Inc., Boston, MA 02199 MFS-CG-FLY-11/
