Stellar YTD 2016 for MFS Massachusetts Investors Growth Stock Fund


Sep. 1 2016, Updated 10:05 a.m. ET

Performance evaluation of the MFS Massachusetts Investors Growth Stock Fund

Through August 26, YTD 2016 has been an excellent one for the MFS Massachusetts Investors Growth Stock Fund – Class A (MIGFX). It is the best performer among the 12 funds chosen for this review in the year so far.

Although the past six months have not been so great, MIGFX remains the best-performing fund in the one-year period. We have 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 the fund’s excellent performance in 2016 so far.

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Contribution to returns

All sectors in which the MFS Massachusetts Investors Growth Stock Fund – Class A (MIGFX) is invested have contributed positively to the fund in YTD 2016. The information technology sector is in the lead, with substantial contributions by Texas Instruments (TXN) and Fidelity National Information Services (FIS). Accenture (ACN) and Taiwan Semiconductor Manufacturing (TSM) have also been important positive contributors.

Although the Class A shares of Cognizant Technology Solutions (CTSH) have dragged on the sector’s returns, its contribution is quite small.

The healthcare sector, which has been a worry for some of the funds in this review, has emerged as the second-largest positive contributor to the fund in this year so far. Cooper Companies (COO) has led the sector, with help from Danaher (DHR) and Mettler-Toledo International (MTD).

The industrials sector closely trails healthcare, powered by Union Pacific (UNP), W.W. Grainger (GWW), and United Technologies (UTX). All stocks comprising the consumer staples sector have contributed positively, led by Colgate-Palmolive (CL).

Investor takeaways

The MFS Massachusetts Investors Growth Stock Fund – Class A (MIGFX) is the only fund in this review that has outperformed the passively managed SPDR S&P 500 ETF Trust (SPY). The fund’s stock selection has been impeccable. Although the healthcare sector has troubled several funds in this review, it has been a sizable positive contributor to MIGFX.

A relatively low exposure to energy stocks has not been a problem due to the superior performance of stocks from other sectors. The fund has seen some difficult times in the past three months. However, given its performance, it won’t be surprising if the fund manager ends 2016 as well as the year began.

Let’s move on to the next fund in this series: the Principal LargeCap Growth Fund I – Class A (PLGAX).


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