MFS Investment Management is global asset management firm that’s headquartered in Boston and has research offices worldwide. Originally called Massachusetts Financial Services Company, MFS Investment Management now has more than 1,200 employees and just over $514 billion in assets under management.
MFS Investment Management Background
The company dates back to 1924, when MFS created Massachusetts Investors Trust (MIT), the first mutual fund in America. In 1969, the company began offering a wider range of products and services and was reorganized as Massachusetts Financial Services. Nearly three decades later in 1996, Massachusetts Financial Services became MFS Investment Management.
The company was purchased by Sun Life Financial of Canada back in 1982. MFS is still an indirect, majority-owned subsidiary of Sun Life Financial Inc., a diversified financial services company. Additionally, MFS Investment Management is the parent company of other investment management companies, which are collectively known as the MFS Global Group.
What Types of Clients Does MFS Investment Management Accept?
The firm works with institutional clients and pooled investment vehicles. More specifically, it serves investment companies, pooled investment vehicles, pension and profit-sharing plans, charitable organizations, state and municipal government entities, insurance companies, sovereign wealth funds and corporations.
Generally, MFS requires an account minimum of $50 million to open an institutional separate account portfolio.
MFS may accept accounts below that minimum at its discretion, such as when promoting a new investment strategy or when an institutional client with multiple accounts above the minimum opens another account below the threshold. Investments in MFS Private Funds are generally limited to investors who are both accredited investors and qualified purchasers.
Services Offered by MFS Investment Management
MFS Investment Management offers a wide range of investment services and products to institutional investors and investment professionals. The company has a family of more than 80 U.S. mutual funds.
Other products offered include variable insurance, exchange-traded funds (ETFs), private funds, UCITS funds, closed-end funds, institutional trusts and 529 college planning.
The firm also manages separate account portfolios for institutional investors, overseeing both equity and fixed-income assets.
MFS Investment Management Investment Philosophy
MFS Investment Management generally takes a long-term approach to investing. In addition to a long-term horizon, MFS' investment philosophy emphasizes active management focused on improving investment outcomes and active engagement with portfolio companies and issuers.
Because MFS believes the markets are fundamentally inefficient, it relies on integrated research when making investments to determine opportunities to exploit the market and create value.
Currently, MFS tracks investments in more than 80 countries. The firm uses its global research platform to facilitate collaboration between its investment teams across the world.
The firm also uses fundamental and quantitative analysis to evaluate securities. Fundamental analysis may include an issuer’s earnings, cash flows, balance sheet, valuation, competitive position and management ability. Quantitative analysis uses models that evaluate factors such as valuation, price and earnings momentum and earnings quality. MFS may also consider environmental, social and governance (ESG) factors when it believes those factors could materially affect an issuer’s economic value.
Fees Under MFS Investment Management
MFS typically charges a percentage of assets under management for its investment advisory services to institutional portfolios. The exact rate charged is negotiable and depends on the investment mandate, or the specific strategy and risk tolerance parameters that are used. Fees are generally charges as a percentage of average month-end assets.
- U.S. Credit Buy and Maintain: 0.08% to 0.14%
- Municipal Long Fixed Income and U.S. Taxable Municipal Fixed Income: 0.175% to 0.25%
- Blended Research Large Cap Growth Equity and Blended Research U.S. Core Equity: 0.20% to 0.25%
- U.S. Core Plus Fixed Income: 0.20% to 0.30%
- Global Aggregate Core Plus: 0.25% to 0.35%
- Opportunistic Fixed Income: 0.25% to 0.35%
- Blended Research International Equity: 0.30% to 0.35%
- Global Aggregate Opportunistic Fixed Income: 0.30% to 0.40%
- Low Volatility Global Equity: 0.30% to 0.40%
- Emerging Markets Debt: 0.375% to 0.45%
- Domestic Balanced: 0.375% to 0.50%
- Blended Research Global High Dividend Equity: 0.40% to 0.50%
- Research (U.S. Equity): 0.40% to 0.55%
- Core Equity, Growth Equity, Large Cap Growth Equity, Large Cap Value Equity, Research Equity Industry Neutral and U.S. Intrinsic Value: 0.40% to 0.55%
- U.K. Equity: 0.40% to 0.55%
- European Equity ex U.K.: 0.45% to 0.55%
- Large Cap Growth Concentrated: 0.45% to 0.60%
- Contrarian Value Equity: 0.50% to 0.65%
- Global Growth Equity and Global Real Estate Equity: 0.50% to 0.65%
- International Research Equity: 0.50% to 0.65%
- Mid Cap Growth Equity and Mid Cap Value Equity: 0.50% to 0.65%
- Technology Equity, U.S. Real Estate and Utilities Equity: 0.50% to 0.65%
- European Research Equity: 0.50% to 0.70%
- Mid Cap Growth Focused Equity: 0.55% to 0.70%
- Global Equity and Global Value Equity: 0.50% to 0.75%
- International Equity, International Growth Equity and International Intrinsic Value Equity: 0.50% to 0.75%
- Small Cap Growth Equity and Small Cap Value Equity: 0.60% to 0.75%
- International Concentrated Equity and International Growth Concentrated Equity: 0.55% to 0.80%
- Global Concentrated Equity: 0.55% to 0.80%
- Emerging Markets Equity: 0.70% to 0.80%
- International Small-Mid Cap Equity: 0.75% to 0.95%
In addition to the above investment advisory fees, clients will also be responsible for other costs including brokerage and transaction costs and custodial fees.
What to Watch Out For
MFS Investment Management does report a regulatory disclosure on its Form ADV, paperwork filed with the SEC. On Aug. 31, 2018, MFS settled an SEC matter related to misstatements and omissions in marketing materials and paid a $1.9 million penalty. Most notably, MFS Investment Management was fined $1.9 million in 2018 by the SEC after the firm allegedly distributed research to institutional clients and prospective clients that contained "material misstatements and omissions."
It should also be noted that MFS Investment Management does not work with individual clients or provide financial planning services.
Opening an Account With MFS Investment Management
If you are an institutional investor or prospective client, you can contact the firm through its website or call (617) 954-5000.
All information is accurate as of the writing of this article.
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