June 28, 2024
A century of innovating
Over its 100-year history, MFS Investment Management has brought several innovations to the market and is said to be largely responsible for the democratization of investing.
First mutual fund in the United States
In 1924, MFS created the first mutual fund in the United States, a revolutionary concept at the time. Previously, equities were the sole domain of the wealthy. They were very expensive to buy. Back then, an individual’s average salary wasn’t enough to buy one share in a known large company. Equities were also difficult to sell, because you had to directly find the buyer yourself. The advent of mutual funds solved these challenges, giving millions of Americans access to financial markets by being able to invest in a diverse basket of companies.
Birth of an in-house research department
MFS was also one of the first investment firms to establish an in-house research department. In 1932, the company created its first advisory committee. Its goal was to gain in-depth knowledge of the securities MFS was trading. It was a team effort, consisting of poring over corporate financial statements and market reports, as well as making analytical site visits to companies.
This mindset continues to drive MFS today. The company has made collective expertise one of the three pillars of its investment process. It continues to carefully analyze companies, regardless of the market they operate in or their location. MFS investment professionals meet with senior executives within companies to help reduce risks. They also do so to clarify their long-term investment analysis. “Collaborating and putting all the findings of our analyses into perspective is the best way to reduce errors. It’s also a good way to help mitigate investment risk,” says Carol Geremia President of MFS Investment Management and Head of Global Distribution.
Active management pioneer
With a growing body of research on the companies it invested in, MFS quickly adopted active risk management as the second pillar of its investment approach. Where the company broke new ground, however, was in active bond management. Before the 1970s, active bond management was not common practice. There was no dedicated team existing in the U.S. at that time, just a few specialists here and there.
Nevertheless, MFS was already specializing in that area, having launched its first balanced mutual fund in the United States in 1970. This allowed investors to reap the diversification benefits of combining equities and bonds.
MFS then created a department dedicated to active fixed income management. But instead of only researching behind closed doors, MFS professionals did site visits to meet directly with institutional deciders, which wasn’t a conventional practice back then. This fresh approach made MFS a pioneer in active fixed income management.
In 1980, MFS launched the industry’s first global bond fund in the U.S. It was also responsible for the first fixed income, high-yield municipal bond fund launched on the New York Stock Exchange. Today, the fixed income capabilities of MFS span multiple categories, including global and Canadian bonds.
Long-term discipline
Over the years, MFS has refined its investment approach. Long-term discipline, the third pillar of its investment process, has enabled the company to weather all market conditions. It first withstood the Great Crash of 1929. During what ended up being the world’s worst economic crisis, MFS continued to pay dividends to investors. More recently, the dot-com bubble burst in 2000 and the Great Recession of 2008 allowed the company to strengthen its long-term approach.
“The biggest weakness in our industry today is measuring success on a short-term basis,” says Carol Geremia. That’s why when MFS invests in a company, we do so from a long-term perspective. In fact, the company has held some corporate securities for over 90 years.
Sun Life MFS Funds1
MFS’ history blends perfectly with Sun Life’s 159-year-long legacy. Both are rich in innovations striving to always put the client first. Sun Life’s acquisition of MFS Investment Management in 1982 was key to building its asset management business group. In 2010, Sun Life launched Sun Life Global Investments, and is proud to have MFS as the sub-advisor to an exclusive suite of 15 mutual funds and a segregated fund line-up.
