21 Jan

Analyzing the MFS Growth Fund’s 2015 Portfolio

WRITTEN BY David Ashworth FEATURED IN Macroeconomic Analysis

MFS Growth Fund

The MFS Growth Fund – Class A (MFEGX) “invests the fund’s assets primarily in equity securities. Equity securities include common stocks, preferred stocks, securities convertible into stocks, equity interests in real estate investment trusts (or REITs), and depositary receipts for such securities.”

The fund has a large-cap focus. Managers adopt a bottom-up approach while selecting securities for the portfolio as well as while liquidating stocks. They invest in those companies that, according to them, have above-average earnings growth potential.

Analyzing the MFS Growth Fund’s 2015 Portfolio

The fund’s assets were invested across 89 holdings as of December 2015, and the fund was managing assets worth $11.8 billion as of the end of December. As of December, its top ten equity holdings included Facebook (FB), Danaher (DHR), Thermo Fisher Scientific (TMO), and Adobe Systems (ADBE). The top ten holdings formed 30.5% of the fund’s December portfolio.

Historical portfolios

For this analysis, we will be considering holdings as of November 2015, as that is when the fund most recently declared its sectoral breakdown. The holdings after November reflect the valuation-driven changes to the portfolio, not the actual holding.

The information technology, consumer discretionary, and healthcare sectors form the core of the MFEGX and are the top three sectors in the portfolio, in that order. Combined, these three sectors form 72% of the fund’s assets. The fund does not invest in the telecom services and utilities sectors.

Over the course of the one-year period ended December 2015, the consumer staples and information technology sectors have seen their share of the portfolio pie increase. On the other hand, energy, financials, industrials, and healthcare have seen reductions in the fund’s portfolio.

Fund managers have stuck with their picks in the consumer staples sector through the year except for one addition and one liquidation. Energy has seen the biggest churn as fund management has exited all stocks except two.

How has the fund’s portfolio positioning impacted its returns in 2015? Let’s look at that in the next article.

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