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A Core Holding With an Enduring Edge

Connor Young

Connor Young: An experienced and well-resourced team, a sturdy approach, and attractive fees make Silver-rated MFS Massachusetts Investors Trust an excellent core holding for investors.

Kevin Beatty and Ted Maloney have expertly guided this strategy since 2004 and 2012, respectively. In 2018, Alison O'Neill Mackey joined as a third comanager. The managers have strong credentials--each holds a key position within MFS' broad research effort--and they tap the firm's deep bench of 100-plus analysts to find attractive investments.

Beatty, Maloney, and Mackey employ a straightforward, sensible approach. The managers search for firms with durable franchises, significant free cash flow, healthy balance sheets, and superior management. They are mindful of valuations, but some of the portfolio's higher-quality companies command premium multiples. As a result, the strategy tends to walk the line between the large-blend and large-growth Morningstar Categories, though it currently resides in large-blend. The managers spread their bets across 80 or so stocks and keep the portfolio's sector weightings roughly aligned with the S&P 500 Index's, limiting stock- and sector-specific risk.

The team has executed this conservative approach well and delivered exceptional long-term results. In addition, below-average costs give this strategy an enduring edge.