MFS Utilities: Not Your Average Utility Fund
This fund’s veteran manager also invests in cable stocks and energy partnerships.
Maura Shaughnessy has seen plenty of ups and downs during her quarter-century tenure at the helm of MFS Utilities (symbol MMUFX). Now, after a few years of so-so results, her fund is again among the leaders in its group.
Shaughnessy invests mostly in bargain-priced electricity, natural gas and water utilities, holding a mix of high-yielding stocks and stocks that pay less but, she expects, will deliver robust share-price gains. She also holds firms that tend to be underrepresented in utilities funds. MFS has nearly 20% of its assets in energy stocks—mostly master limited partnerships—and 15% in cable-TV operators, such as Comcast, and telecommunications companies.
Shaughnessy is far more willing than her rivals to go abroad. At last word, her fund had 30% of its assets in foreign stocks, compared with 11% for the average utility fund. That has hurt MFS’s performance because U.S. stocks have done far better than foreign issues in recent years. But as a result, Shaughnessy says, she has never seen foreign utilities so cheap relative to their U.S. counterparts.
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MFS Utilities has rewarded patient investors. It has been the top-performing utilities fund over the past 25 years, with a 10.9% annualized return. The fund’s Class A shares, which yield 2.8%, normally levy a 5.75% sales charge, but you can buy them without a load at several online brokers.
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