Q: Is the MFS Value Fund a good investment? It has been recommended.
L.M., via the Internet
A: It is a consistent blue-chip value fund that doesn’t get into restructuring or bankruptcy plays. Holding around 100 primarily domestic stocks in its portfolio, it spreads around risk and keeps volatility to a minimum.
It is also the largest fund in the MFS family, with $16 billion in assets.
MFS Value Fund “A” (MEIAX) is down 5 percent over the past 12 months and has a three-year annualized return of 9 percent. Both results rank in the top one-fifth of large value funds.
“While I like this fund the best of the MFS domestic equity funds, it is not an analyst pick because there are better large-cap value funds out there,” said Andrew Gunter, analyst with Morningstar Inc. in Chicago. “However, it is a good fund if, say, your 401(k) plan offers mostly MFS funds or you are limited for other reasons, for it is a good one to buy if you’re a long-term investor.”
Lead manager Steven Gorham, who also helps manage MFS Global Total Return Fund, was joined by former telecommunication services analyst Nevin Chitkara in 2006. Using fundamental research, they emphasize strong brand franchises, healthy balance sheets and strong operations. Although they emphasize domestic large-cap stocks, they can go anywhere they find value.
Gorham invests more than $1 million of his own money in the fund, while Chitkara invests between $500,000 and $1 million. They also invest significant amounts in other funds they co-manage.
Last year, astute trimming of their Goldman Sachs Group Inc. holdings after a price run-up, their move into an improving Intel Corp. and their success with energy firm Hess Corp. were indicative of solid fund management.
Nearly one-fourth of MFS Value holdings are in financial services, with other significant concentrations in energy and industrial materials. Its top holdings are Lockheed Martin Corp., Altria Group Inc., Allstate Corp., Exxon Mobil Corp., Total SA, Metropolitan Life Insurance Co., Johnson & Johnson, Bank of America Corp., AT&T Inc. and Bank of New York Mellon Corp.
This fund requires a 5.75 percent “load” (sales charge) and $1,000 minimum initial investment. Annual expense ratio is 1.11 percent.
Q: How can you check out a broker’s record?
A.D., via the Internet
A: Federal and state securities laws require brokers, investment advisers and their firms to be licensed or registered and to make important information public.
Investigate a broker at the BrokerCheck hot line ( www.finrabrokercheck.org, 800-289-9999), which has information on all registered brokers.
Run by the Financial Industry Regulatory Authority, BrokerCheck tracks employment history, customer complaints, disciplinary actions, settlements, bankruptcies and other information.
“Investors can also check up on brokers through state securities regulators, though the information may be presented differently, and it is a good idea to check all sources,” said Nancy Condon, a representative with the group in Washington, D.C. “If you see your broker do something you don’t like, you should not be embarrassed to ask the broker about it.”
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If you plan to do business with a brokerage firm, the Securities and Exchange Commission advises finding out whether the firm and its clearing firm are members of the Securities Investor Protection Corp., which provides limited customer protection if a firm becomes insolvent.
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Andrew Leckey is a Tribune Media Services columnist. E-mail him at yourmoney @tribune.com.