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MFS Investment Management Review

MFS Investment Management is an advisory firm that exclusively serves institutional investors. We review the company and its services in this guide.

A subsidiary of Canada-based Sun Life Financial, MFS Investment Management is an advisory and portfolio management firm headquartered in Boston, Massachusetts. It offers a set of services to institutional investors, including both discretionary and non-discretionary management. The company is also well known for creating and maintaining the first-ever mutual fund, the Massachusetts Investor Trust (MIT).

This review will provide a detailed overview of MFS’s types of clients, services, and fee structures. We’ll also offer some information about the company’s reputation, including the disclosures listed on its Form ADV filing with the U.S. Securities and Exchange Commission (SEC).

Assets Under Management

$534.248 billion

Number of Employees

1,200

Date Founded

1924

CEO

Michael Roberge

Fee Structure

Fee-only

Headquarters Address

111 Huntington Ave.

Boston, MA 02199

Phone Number

(617) 954-6450

Pros and Cons of MFS Investment Management

Pros

  • Offers both discretionary and non-discretionary services
  • Clear investment philosophy
  • An extensive list of investment strategies
  • Upholds a fiduciary duty

Cons

  • Only offers services to institutional investors
  • Recent disclosures

Types of Clients

MFS exclusively offers its services to institutional investors and pooled investment vehicles. This includes investment companies, charitable organizations, pension and profit-sharing plans, and mutual and hedge funds. The company doesn’t provide any of its advisory or management products to individuals, even those with a high net worth.

To open a separate account with MFS, an organization must have at least $50 million in investable assets. In its Form ADV, the firm notes, however, that account minimums can depend on the product and that it can accept smaller sizes at its discretion.

Financial Advisor Services

MFS provides institutional investors with investment management and advisory on both a discretionary and non-discretionary basis. In addition, it manages pooled investment vehicles, including mutual funds and 529 plans.

Below is a more specific breakdown of the company’s services:

Discretionary Investment Management

MFS’s discretionary investment management assists institutional clients with portfolio construction and monitoring. The firm claims that it uses “fundamental and quantitative analysis” to select securities for clients. Additionally, one or more portfolio managers may be responsible for an account at a given time.

The firm’s investment managers may use any one of the following techniques to help a client build their portfolio, including:

  • Long- and short-term investments
  • Short sales
  • Swaps
  • Futures
  • Forwards
  • Margin transactions
  • Options

Non-Discretionary Advice

MFS also offers non-discretionary advisory services to institutional investors. This includes guidance and recommendations regarding portfolio construction. However, this arrangement doesn’t give the firm authority to buy and sell securities on your behalf.

More specifically, MFS’s managers review clients’ asset allocation and overall portfolio structure. Then, they may make suggestions to improve or maintain an institutional investor’s portfolio.

Fee Structure

MFS uses an assets under management (AUM) fee structure, which means it charges clients based on the dollar amount of the AUM they have. The company notes that these are up for negotiation and, in general, are based on the investment strategy of the account.

Below is an illustration of the standard fee ranges for each type of investment strategy:

Investment StrategyPercentage of Month-End AUM
Municipal Core Fixed Income and Municipal Plus0.30 to 0.20
Corporate BB Fixed Income0.275 to 0.175
Blended Research Large Cap Growth Equity, Blended Research U.S. Core (ESG) Equity, and Blended Research U.S. Core Equity0.30 to 0.20
U.S. Core Plus Fixed Income0.30 to 0.20
Blended Research International Equity0.40 to 0.30
Low Volatility Global Equity0.40 to 0.30
Emerging Markets Debt0.45 to 0.375
Domestic Balanced0.50 to 0.375
Blended Research Global High Dividend Equity0.50 to 0.40
Core Equity, Growth Equity, Large Cap Growth Equity, Large Cap Value Equity, Research Equity Industry Neutral, and U.S. Intrinsic Value0.55 to 0.40
U.K. Equity0.55 to 0.40
European Equity ex U.K.0.55 to 0.45
Contrarian Value Equity0.65 to 0.50
Global Growth Equity, Global Infrastructure and Global Real Estate Equity0.65 to 0.50
International Research Equity0.65 to 0.50
Mid Cap Growth Equity and Mid Cap Value Equity0.65 to 0.50
Technology Equity, U.S. REIT, and Utilities Equity0.65 to 0.50
European Research Equity0.70 to 0.50
Mid Cap Growth Focused Equity0.70 to 0.55
Global Equity and Global Value Equity0.75 to 0.50
International Equity, International Growth Equity, and International Intrinsic Value Equity0.75 to 0.50
Small Cap Growth Equity and Small Cap Value Equity0.75 to 0.60
Global Concentrated Equity0.80 to 0.55
International Concentrated Equity0.80 to 0.55
Emerging Markets Equity0.80 to 0.70
International Small-Mid Cap Equity0.95 to 0.75
Note: the above information comes from MFS Investment Management’s client-facing brochure (Form ADV Part 2A).

Investment Philosophy

MFS outlines its investment philosophy in detail in its Form ADV. As mentioned, it says it uses both fundamental and quantitative approaches, which include and focus on a sweeping range of details, including ESG (environmental, social, and governance) and various mathematical models.

The company also notes in detail, both on its website and filing with the SEC, that it considers risk an important component of each decision it or its managers make. It emphasizes that risk is a real danger to investments and their underlying strategies and that returns are never a guarantee.

MFS also highlights that it values taking a long-term approach to building its client’s portfolios. In essence, the company says that this affords its strategies enough time to develop. This is a common position that many companies take and is often a strong sign, as it means that it believes in its strategies and is willing to work with customers for the long haul.

Disclosures

MFS Investment Management is registered with the SEC as an investment advisor (RIA). This requires it to disclose all disciplinary actions, including criminal proceedings, arbitrations, and administrative actions, to the public.

On its Form ADV, MFS makes prospective and existing clients aware of an incident that occurred in 2018 where the SEC claimed that it either omitted or misrepresented important information in some of its client-facing marketing materials. As a result, the firm was required to pay $1.9 million.

Methodology

This review is based on publicly available information directly from MFS Investment Management’s website and the SEC. Neither the firm nor its representatives have any say on what we’ve included on this page.

Frequently Asked Questions

Is MFS Investment Management a fiduciary?

MFS Investment Management must uphold a fiduciary duty to its clients because it’s an RIA with the SEC. This registration also means that its employees are investment advisor representatives (IARs), which means they must also carry out high ethical standards.

Is MFS Investment Management a good advisory company?

MFS is a well-known company that has been around for 100 years. With over $500 billion AUM, the firm has many clients it works with to build and manage portfolios. The primary drawback, of course, is that it only serves large organizations, making it inaccessible to regular clients.

Can regular people open an account with MFS?

Regular investors can’t receive financial advice or investment management services from MFS. This is because the company only offers its advisory services to institutional investors, such as businesses, charitable organizations, and pension and profit-sharing plans, as well as investment vehicles.

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