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Is MFS Value R6 (MEIKX) a Strong Mutual Fund Pick Right Now?

·4 min read

Mutual Fund Equity Report fund seekers may want to consider taking a look at MFS Value R6 (MEIKX). MEIKX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

MFS is responsible for MEIKX, and the company is based out of Boston, MA. Since MFS Value R6 made its debut in June of 2012, MEIKX has garnered more than $21.93 billion in assets. The fund's current manager, Nevin P. Chitkara, has been in charge of the fund since June of 2012.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.77%, and it sits in the middle 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 12.82%, 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. Compared to the category average of 15.61%, the standard deviation of MEIKX over the past three years is 17.59%. The fund's standard deviation over the past 5 years is 16.07% compared to the category average of 13.69%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.93, so it is likely going to be less volatile than the market at large. 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. MEIKX has generated a negative alpha over the past five years of -2.3, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.

The mutual fund currently has 93.21% of its holdings in stocks, which have an average market capitalization of $133.10 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance

  2. Industrial Cyclical

With turnover at about 8%, this fund makes fewer trades than comparable funds.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MEIKX is a no load fund. It has an expense ratio of 0.42% compared to the category average of 0.99%. MEIKX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

Overall, MFS Value R6 ( MEIKX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare MEIKX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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