There are plenty of choices in the Large Cap Value category, but where should you start your research? Well, one fund that might be worth investigating is MFS Value R6 (MEIKX). MEIKX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
MEIKX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds’high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
MEIKX finds itself in the MFS family, based out of Boston, MA. MFS Value R6 made its debut in June of 2012, and since then, MEIKX has accumulated about $15.85 billion in assets, per the most up-to-date date available. The fund is currently managed by Steven Gorham who has been in charge of the fund since June of 2012.
Investors naturally seek funds with strong performance. MEIKX has a 5-year annualized total return of 9% and is in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 11%, which places it in the middle third during this time-frame.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The fund’s standard deviation over the past 5 years is 11.97% compared to the category average of 1.01%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.
Nevertheless, with a 5-year beta of 0.96, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.43. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, MEIKX is a no load fund and it has an expense ratio of 0.47%.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
This puts this fund from MFS in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Large Cap Value category.
This could just be the start of your research on MEIKXin the Large Cap Value category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.