A Look at MFEGX’s Portfolio Moves prior to 1Q16



MFS Growth Fund

The MFS Growth Fund Class A (MFEGX) invests “primarily in equity securities. Equity securities include common stocks, preferred stocks, securities convertible into stocks, equity interests in real estate investment trusts [REITs], and depositary receipts for such securities.”

The fund has a large-capitalization focus. Managers adopt a bottom-up approach while selecting securities for the portfolio and liquidating stocks. They invest in companies they believe have above-average earnings growth potential.

The fund’s assets were invested across 89 holdings as of March 2016, unchanged from a quarter ago. It was managing assets worth $11.8 billion as of March’s end.

As of February, its equity holdings included Facebook (FB), Thermo Fisher Scientific (TMO), Danaher (DHR), Adobe Systems (ADBE), and Intercontinental Exchange (ICE). These stocks formed a combined 13% of its assets.

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Historical portfolios

For this analysis, we’ll be considering MFEGX’s holdings as of February 2016, as that is the fund’s latest available sectoral breakdown. The fund’s holdings post-February reflect valuation-driven changes to its portfolio, not its actual holdings.

The information technology, consumer discretionary, healthcare, and consumer staples sectors form the core of MFEGX. While the top two sectors form over half of the fund’s assets, the four sectors combined account for 83% of its portfolio. The fund is not invested in the telecommunications services or utilities sectors.

In the past year, MFEGX has increased its exposure to the information technology and consumer staples sectors. At the same time, the fund’s managers have reduced its exposure to the healthcare and industrials sectors and reduced its energy exposure to nearly zero.

The consumer staples and information technology sectors have seen a couple of stocks added to MFEGX in the past six months, while the composition of the materials sector has remained unchanged in the past year.

How has the fund’s portfolio positioning impacted its returns in 1Q16? Let’s look at that in the next article.


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