Investment Manager Due Diligence

Return to List December 2003* MFS Massachusetts Investors Growth Stock Fund MFS has been informed that the staff of the Boston office of the Securities and Exchange Commission (SEC) intends to recommend to the SEC that a civil enforcement action be brought against MFS alleging, in effect, that the disclosure in certain of MFS' fund prospectuses concerning market timing was false and misleading, and breach of fiduciary duty. According to press reports, MFS employees allegedly told brokers there was a list of "unrestricted funds" available for excessive trading, including the subject fund. Such excessive trading arrangements were not disclosed in the prospectus. Rather, the prospectus stated MFS funds do not permit excessive trading practices that may harm performance. SBA has been in contact with Nationwide (bundled provider), MFS and Callan on this issue. Abuses could have affected FRS investments. Finally, the fund's performance has been respectable over the last 5 years, but has been notably weaker in recent periods: ranking in the 60th percentile of Callan peers over the 3 year period (ending September) and underperforming its benchmark by 592 basis points and 355 basis points in the 1 and 2 year periods ending November, respectively. *Please note that in providing this information, the SBA is not in any way intending to influence or inform your investment decisions. Also, this list can change at any time without prior notice from the SBA.