Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

MFS Investment Management: ‘The Quiet Company With Lots of Success’

Your article was successfully shared with the contacts you provided.

“We’re the quiet company that’s having a lot of success at an otherwise tough time for many asset management companies,” said Robert Manning, chairman and CEO of MFS Investment Management.

Manning told AdvisorOne of Friday that the Boston-based company had “flows coming into every channel” as many of its competitors struggle with stemming ongoing outflows.

Maybe it has something to do with longevity. MFS is the nation’s oldest mutual fund company, and widely credited with developing the nation’s first mutual fund, MFS Massachusetts Investors Trust (MITTX).  But that longevity also extends to its people; for example, Manning rose through the ranks to his current position after starting as an analyst in 1984.

Manning doesn’t buy it, and notes other reasons for the firm’s success.

“What we’re doing is straight down the middle,” he said. “We’re not doing private equity or many of the other hot, new things that many of our competitors are doing. We have our global institutional business, our offshore business, our domestic retail business and then the pension and endowment money we manage.”

Part of the reason for avoiding so much of what others are doing is that fact that the company is owned by the Canadian giant Sun Life Financial, which purchased MFS for $65 million in 1982. As of April 30, MFS reports $358.8 billion in assets under management.  

“Because we’re owned by Sun Life, we don’t have the same pressures as public companies,” Manning added. “We built our business organically, which is different than many other asset managers. We have a centralized manufacturing engine that feeds every one of our new products, and those products are based on strong security selection.”

It’s a way to ensure durability, consistency and “the ability to perform in all markets.”

His last point begged the question, “What about their research process?”

“It’s very disciplined and each analyst has to really dig deep into the fundamentals of the industry and the competitive universe in which they exist,” he explained. “On top of that, they obviously have to know each security and its relative value, and ensure there is enough of a cushion for protection on the downside. It’s all about marrying those two disciplines.”

He added that the company performs a “360 review” of their analysts twice a year, in which analysts rank each other according to the quality of their work and how well they interact with the team over all.

“You might have a star analyst who is very good at research, but if they’re not a good member of the team, they won’t rank very high.”

MFS recently completed the rollout of Class R5 shares for 40 of the firm’s U.S. mutual funds. According to the company, Class R5 shares allow it to offer “a lower-cost share class option to plan sponsors of—and advisors working with—qualified retirement plans, including 401(k) plans.”

Class R5 shares, unlike many other share classes, do not pay sub-accounting fees and therefore pass on lower expenses to retirement plan participants, it noted.

“An immediate benefit of the rollout has been the lowering of the total expense ratios of the firm’s Lifetime target date and Asset Allocation target risk funds,” said Ryan Mullen, head of MFS’ Defined Contribution Investments (DCI) group.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.