SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
MFS Government Markets Income Trust
(Name of Issuer)
Common Stock
(Title of Class of Securities)
552939100
(CUSIP Number)
George W. Karpus, President
Karpus Management, Inc. d/b/a
Karpus Investment Management
14 Tobey Village Office Park
Pittsford, New York 14534
(716) 586-4680
(Name, Address, and Telephone Number of Person Authorized to Receive
Notices and Communications)
October 9, 2001
(Date of Event which Requires Filing of this Statement)
If the person has previously filed a statement on Schedule 13G to
report the Acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1 (b) (3) or (4), check
the following box. [ ]
(Page 1 of 6 pages)
Exhibit 1 attached.
ITEM 1 Security and Issuer
Common Stock
MFS Government Markets Income Trust
MFS Funds
500 Boylston Street
Boston, Mass. 02116
ITEM 2 Identity and Background
a) Karpus Management, Inc. d/b/a Karpus Investment
Management ("KIM")
George W. Karpus, President, Director and Controlling
Stockholder
JoAnn VanDegriff, Vice President and Director
Sophie Karpus, Director
b) 14 Tobey Village Office park
Pittsford, New York 14534
c) Principal business and occupation - Investment Management
for individuals, pension and profit sharing plans, corporations,
endowments, trust and others, specializing in conservative asset
management (i.e. fixed income investments).
d) None of George W. Karpus, JoAnn VanDegriff, or Sophie
Karpus ("the Principals") or KIM has been convicted in the past
five years of any criminal proceeding (excluding traffic
violations).
e) During the last five years none of the principals or KIM has
been a party to a civil proceeding as a result of which any of them
is subject to a judgment, decree or final order enjoining future
violations of or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
f) Each of the Principals is a United States citizen.
KIM is a New York corporation.
ITEM 3 Source and Amount of Funds or Other Considerations
KIM, an independent investment advisor, has accumulated shares
of MGF on behalf of accounts that are managed by KIM ("the
Accounts") under limited powers of attorney. All funds that
have been utilized in making such purchases are from such
Accounts.
ITEM 4 Purpose of Transaction
a) KIM has purchased Shares for investment purposes. Being
primarily a fixed income manager, with a specialty focus in the
closed end fund sector, the profile of MGF fit the investment
guidelines for various Accounts. Shares have been acquired
since October 21, 1992.
b) Although originally purchased for investment purposes only, upon
reviewing the Fund's most recent proxy, we believe that some of the
proposals are not in the best interests of the Shareholders.
ITEM 5 Interest in Securities of the Issuer
A) As of the date of this Report, KIM owns 1,009,117 shares,
which represents 1.68% of the outstanding Shares. Sophie Karpus
(Director) presently owns 700 shares purchased August 3, 1993 at
a price of $7.27 per share (350 shares) and December 29, 1999 at a
price of $5.75 per share (350 shares). Karpus Profit Sharing Plan
presently owns 700 shares purchased February 15 & 22, 1995 at a
price of $6.10 per share. None of the other Principles of KIM presently
owns shares of MGF.
b) KIM has the sole power to dispose of and to vote all of such
Shares under limited powers of attorney.
c) Open market purchases for the last 60 days for the Accounts.
There have been no dispositions and no acquisitions, other than
by such open market purchases,
DATE
SHARES
PRICE PER
SHARE
9/10/01
-2300
6.73
9/19/01
12200
6.54
The Accounts have the right to receive all dividends from, any
proceeds from the sale of the Shares. KIM reserves the right to
further accumulate or sell shares. None of the Accounts has an
interest in shares constituting more than 5% of the Shares
outstanding.
ITEM 6 Contracts, Arrangements, Understandings, or Relationships
with Respect to Securities of the Issuer.
Except as described above, there are no contracts,
arrangements, understandings or relationships of any kind
among the Principals and KIM and between any of them and any
other person with respect to any of MGF Securities.
ITEM 7 Materials to be Filed as Exhibits
One exhibit attached.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete,
and correct.
Karpus Management, Inc.
October 9, 2001 By:________________________
Date Signature
George W. Karpus, President
Name/Title
Exhibit 1
Karpus Investment Management currently represents beneficial ownership of
approximately 1,009,117 shares (as of 9/30/01) of MFS Government Markets
Income Trust on behalf of various clients. I have reviewed the proxy materials
for the Fund's meeting of October 31, 2001 and numerous proposals contained
in the material have alarmed me.
The proposal for consolidation of the Trustees across all funds, while it may
enhance the efficiency of the boards, creates a situation where the Trustees
may receive a larger percentage of their annual earnings from this activity.
It has been argued by many that this reduces the "unbiased" nature of a board
and may even place the Trustees in the position of being a "quasi-employee"
of the Fund.
The proposal to adopt an Amended and Re-stated Declaration of Trust gives
The Trustees greater flexibility and broader authority to act without
shareholder approval and requires that shareholders only receive a written
notification of any reorganization transaction. The Trustees of the Fund are
severely increasing their fiduciary liability by propositioning the
shareholders to delegate this authority from their own hands to those of the
board. By allowing the Trustees to act by a two-thirds majority instead of
unanimously, factions could be created that would support management
proposals. These factions could fulfill any wishes of management, which
may not be deemed the best interest of the shareholders in terms of policy
of the Fund.
The current policy of the Fund regarding certain investment restrictions and
policies being classified as "fundamental", matters that cannot be changed
without approval of the holders of a majority of the outstanding shares of the
Fund's Common stock, ensures that the intentions of the shareholders will be
adhered to. A change of investment policy, which removes the fundamental
policy of 65 % of the funds assets being invested in U.S. Government and
Agencies making it a non-fundamental investment policy subject to change
without shareholder approval, allows the Fund to make changes that may
not be acceptable to shareholders. Deterioration of the credit quality of the
fund could force institutional holders to mass exit. Certain holders (in the
case of managed accounts) may have investment restrictions, which dictate
the acceptability of the investment. By allowing change without notification
or vote of the shareholders may force such holders to sell in the market place
which would place undue pressure on fund shares and further widen the
discount at which the fund trades, ultimately harming all shareholders. This
risk is not identified in either the Fund's original prospectus or the current
proxy materials.
Risk is further assumed within the fund by allowing the use of margin, short
sales, the ability to lend money and revising the percentage of investments in
a single issuer. Risk here is seen in the form of economic, political or
regulatory revisions. The addition of illiquid securities may produce problems
in pricing the funds assets, increasing the Fund' discount causing economic
harm to the shareholders.
Should the board advocate the current proposal of the Fund, they should also
allow the shareholders that do not agree with the recommendations, the ability
to redeem any and all shares that they own or represent at net asset value.
This will decrease the probability of the discount widening due to the sales
into the marketplace by dissenting shareholders.
The Fund, in my opinion, has not adequately disclosed to the shareholders the
inherit risk of increasing the discount to market value caused by shareholders
that are not willing to support management's proposals. It is my belief that
this risk of economic loss must be fully disclosed to all fund shareholders.
It is my hope that you will consider allowing shareholders that do not approve
of the proposals presented by management to tender their shares at net asset
value. This would prevent harming the shareholders remaining in the Fund.
Should these proposals be accepted, it is my belief that the Board will be
exposing the shareholders to a further widening of the discount. Dissenting
shareholders, who are forced to react by selling their shares may, by sheer
magnitude of sales, create downward price pressure. This possibility would
cause greater economic harm to the remaining shareholders, than the increased
costs resulting from a tender offering shrinking the size of the Fund.