Skip to Content
US Videos

These Similar Growth Funds Aren't Interchangeable

Silver-rated MFS Growth and Bronze-rated MFS Mid Cap Growth may share a team and a process, but only one is suitable as a core holding.

Mentioned: ,

Andrew Daniels: Silver-rated MFS Growth and Bronze-rated MFS Mid Cap Growth have several similarities. Both funds are managed by Eric Fischman, Matt Sabel, and Paul Gordon, and they're supported by MFS's deep fundamental analyst team. The process at both funds is focused on finding firms with underestimated earnings and cash flow growth prospects to hold for the next three to five years. The team seeks firms with pricing power, strong secular growth outlooks, and solid management teams. Not surprisingly, both funds' price multiples and earnings-growth rates trend well above their respective benchmarks. And as of June 2017, approximately 30% of the mid-cap fund's holdings were also in MFS Growth. 

Despite many similarities, there are some differences to be aware of. The growth fund is in the large growth Morningstar Category, and the average market cap of its holdings is $90 billion, while the mid-cap fund is in the mid-cap growth category and the average market cap of its holdings is just $13 billion. Moreover, the growth fund earns a Positive Price rating because of its Below Average fees, while the mid-cap fund earns a Neutral Price rating due to its middling fees. 

Andrew Daniels does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.