MFS Value Fund

^#79 in Large Value

U.S. News evaluated 330 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 19.05 percent over the past year, 11.89 percent over the past three years, 4.75 percent over the past five years, and 8.93 percent over the past decade.

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Summary

The MFS Value Fund has achieved consistent returns by investing in shares of undervalued companies.

As of May 03, 2013, the fund has assets totaling $25.52 billion. Its portfolio consists of common stocks in primarily large-cap companies both in the United States and abroad.

The fund finished 2010 near the bottom of its category. Management has made a big bet on financials, which have struggled most of 2010. About a quarter of the portfolio is invested in names like Goldman Sachs and Bank of America. Although this large value fund has regularly topped its Morningstar category’s average returns, it lagged its category during market rallies in 2003 and 2009. It finished 2009 in the bottom half of Morningstar's large value category. The fund has returned 19.05 percent over the past year and 11.89 percent over the past three years.

Management generally focuses on companies with strong brand franchises across a wide variety of sectors, according to Morningstar. Over the last decade, the fund has trounced other funds in its category. The fund has returned 4.75 percent over the past five years and 8.93 percent over the past decade.

Investment Strategy

The fund’s management invests in stocks of primarily large-capitalization companies that look undervalued relative to their perceived worth. These value companies tend to have stock prices that are low relative to their earnings, dividends, assets, or other financial measures. The portfolio mostly consists of U.S. stocks.

Role in Portfolio

Morningstar calls the fund a core player in a portfolio, saying, “This large-value vehicle is diversified enough to be part of a core portfolio.”

Management

Steven Gorham and Nevin Chitkara manage this fund. Gorham joined the fund in January 2002 and has worked at MFS since 1992. Chitkara joined the fund in 2006 and has worked at MFS since 1997. Says Morningstar: “[T]he managers’ disciplined approach, centered on valuation and high-quality companies, ensures a steady-Eddie portfolio full of large- and mega-cap household names.”

Fees

MFS Value Fund has an expense ratio of 0.93 percent.

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Risk

The fund’s foreign investments come with risks related to changes in a country’s political, economic, social, and currency conditions. The fund may be slow to rally compared with its category. The fund’s investments in derivatives may also be risky as they tend to be highly volatile.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2013-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 2 for one year, 3 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2013-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2013-03-12

In the annual Lipper/Barron’s Fund Families Survey for 2009, MFS Investment Management ranks 24th out 61 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “This fund is supported by a highly independent board of directors and a fund-manager pay package that does a good job aligning fund management's interests with those of fund shareholders. MFS' culture has improved in the past several years, and its fund shareholders have benefited."

Morningstar 2011-02-02

In the annual Lipper/Barron’s Fund Families Survey for 2009, MFS Investment Management ranks 24th out 61 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “This fund is supported by a highly independent board of directors and a fund-manager pay package that does a good job aligning fund management's interests with those of fund shareholders. MFS' culture has improved in the past several years, and its fund shareholders have benefited."

Morningstar 2011-02-02