MFS Lifetime Retirement Income Fund

Fund Overview

Intended for retirees looking to generate steady income while growing their nest egg, the MFS Lifetime Retirement Income fund rolls multiple stock and bond funds into a single investment, providing instant diversification.

As of April 04, 2012, the fund has assets totaling almost $160.32 million invested in 22 different holdings. Its portfolio remains fairly static and consists primarily of corporate and U.S. treasury bond funds, with a smaller share in domestic and foreign stock funds. Recently, the fund added a global real estate fund and a commodity fund for additional diversification.

The Lifetime Retirement Income Fund is the final and most conservative fund in MFS's lineup of target-date retirement income funds. Other products in the Lifetime Funds series include the Lifetime 2010, 2020, 2030, 2040, and 2050 funds. The fund is designed to appeal to investors who need growth but also more security, fund manager Joe Flaherty says.

The built-in diversification allows investors to buy one fund, but actually invest in 19 underlying MFS-managed stock and bond funds, each with varying goals and market positions.

The fund's performance has been solid since its 2005 launch. In 2010, strong performance from its equity investments in mid-cap value and growth funds gave the fund a boost. Its research bond fund, which capitalizes on the collective wisdom of MFS's bond analysts, also contributed to gains. It returned 5.34 percent over the past year and 13.07 percent over the past three years, outperforming both its benchmark and category.

Investment Strategy

This fund seeks to provide a steady stream of income for retirees and holds an array of underlying MFS funds to maximize diversification. "This fund is intended to be a strategic allocation, we're not moving in response to the markets," Flaherty says. "It's an efficiently diversified mix of assets at the top level and at the fund level so we're getting that second layer of diversification."

Role in Portfolio

Morningstar calls this fund a "core" investment.

Management

MFS senior vice president Joseph Flaherty, Jr. has overseen the fund since its launch in 2005. The firm has a strong research operation and boasts many seasoned portfolio managers and analysts.

In the annual Lipper/Barron's Fund Families Survey of 2010, MFS Investment Management ranks 38 out of 57 fund families surveyed.

Lipper 2011-04-01

Performance

The fund has returned 5.34 percent over the past year and 13.07 percent over the past three years.

Hypothetical Growth of $10,000

Updated 03.31.2012

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Holdings

The fund is broadly diversified, spreading its investments among giant-, large-, and mid-cap companies. It invests in a range of industries including financial services, health care, and consumer goods.

Asset Allocation

	% Long	% Short	% Net
Cash	10.95	1.49	9.45
Stocks	18.92	0.01	18.91
Bonds	49.44	0.0	49.44
Other	0.1	0.02	0.08
Foreign Bonds	15.12	0.0	15.12
Foreign Stocks	6.69	0.0	6.69
Convertible	0.01	0.0	0.01
Preferred	0.3	0.0	0.3

Updated 02.29.2012

Top Holdings

Performance as of 03.31.2012

Portfolio as of 02.29.2012

	% Net Assets
MFS Research Bond I	22.12
MFS Limited Maturity I	20.11
MFS Government Securities I	10.05
MFS Inflation Adjusted Bond I	10.05
MFS Global Bond I	5.03

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Fees

MFS Lifetime Retirement Income Fund has an expense ratio of 0.28 percent.

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Risk

As with other retirement income products, this fund is not a guaranteed source of income.

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