Which Picks Have Been a Boon for the MFS Growth Fund so Far in 2016?


Jul. 22 2016, Published 7:55 p.m. ET

Performance evaluation

The MFS Growth Fund Class A (MFEGX) has gained by 3.2% YTD (year-to-date) in 2016. This rise makes the fund figure among the above-average performers in the year so far, among the 12 funds we’ve chosen for this review. In the past year until July 15, the fund has been the best performer among peers.

We’ve graphed its performance against two ETFs: the iShares S&P 500 Growth ETF (IVW) and the iShares Russell 1000 Growth ETF (IWF). Let’s look at what has contributed to this good performance by the fund YTD in 2016.

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Portfolio composition and contribution to returns

Both consumer-focused sectors—discretionary and staples—are among the top three positive contributors to the fund in 2016 so far. The consumer discretionary sector has been helped by Dollar Tree (DLTR), Comcast (CMCSA), and Dollar General (DG), among others. Meanwhile, the consumer staples sector has been led by Constellation Brands (STZ). One of the reasons that consumer staples have done well is because of the absence of major negative contributors.

The materials sector closely tail staples and represents the third-biggest positive contributors. Vulcan Materials (VMC) and Sherwin-Williams (SHW) have benefitted materials. Similar to staples, the absence of any negative contributor has been of great help to the sector. While Equifax (EFX) has helped industrials, American Tower (AMT) has helped financials up.

The healthcare sector has been the sole negative contributor to the fund in the year so far. Alexion Pharmaceuticals (ALXN) and Regeneron Pharmaceuticals (REGN), among others, have led the sector down. However, Danaher (DHR) has been able to reduce some of the drag.

Investor takeaways

MFEGX has been having an above-average 2016. The good thing is that just one sector has dragged on its performance. But on the flip side, except for consumer discretionary, no sector has been a standout performer for the fund. YTD, it has underperformed the SPDR S&P 500 ETF (SPY).

However, the fund’s stock picks from consumer discretionary, financials, and materials have done better than those making up these sectors in SPY. Existing investors have little reason to move away from the fund, while potential investors might consider including it in their shortlists if some aspect of MFEGX is appealing to them.

We’ll look at the JPMorgan Large-Cap Growth Fund Class A (OLGAX) in the next part of our series.


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