Performance evaluation of MIGFX
As of May 27, 2016, the MFS Massachusetts Investors Growth Stock Fund Class A (MIGFX) had risen by 5.3% in YTD 2016, making it the best performer among the ten funds in this review.
We have graphed its performance against the PowerShares QQQ Trust, Series 1 ETF (QQQ) and the iShares Russell 1000 Growth ETF (IWF). Let’s look at what’s contributed to MIGFX’s stellar performance in 2016.
Portfolio composition and contribution to returns
The primary reason that MIGFX has outperformed its peers YTD (year-to-date) in 2016 is that no sector has contributed negatively to its returns—a big plus, given that every other fund has struggled due to negative contributions from more than one sector.
The information technology sector has led in terms of positive contributions so far in 2016. Accenture (ACN) has been the star performer from the sector, with Fidelity National Information Services (FIS) and Texas Instruments (TXN) also contributing in good measure. However, class A shares of Alphabet (GOOG) have dragged slightly on the sector’s returns.
The industrials sector has followed, led by W.W. Grainger (GWW). Danaher (DHR) and Equifax (EFX) have also been major positive contributors. Interestingly, no stock in the sector has dragged on its returns.
Consumer staples stocks have been a distant third in terms of positive contributions. Colgate-Palmolive (CL) has been the biggest positive contributor from the sector. The materials sector has closely followed the consumer staples sector. It’s been led by Monsanto Company (MON).
Comparison with QQQ
To put it simply, passively managed QQQ has been no match for MIGFX in 2016 so far. There’s been no sector in which QQQ has even been close to the returns posted by MIGFX.
MIGFX has had a brilliant run so far in 2016. Even in sectors such as consumer discretionary, healthcare, and financials, which have troubled its peers, the fund has been able to generate positive returns.
A long-term review would be helpful in determining if this has been a skill-based performance or if market conditions have been generous to the companies in which the fund invests.
Let’s move on to the next fund in this series, the Principal LargeCap Growth Fund I Class A (PLGAX).