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

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If you have been looking for Large Cap Value funds, a place to start could be MFS Value R6 (MEIKX - Free Report) . MEIKX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

MEIKX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream find these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds' high growth opportunities are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.

History of Fund/Manager

MFS is responsible for MEIKX, and the company is based out of Boston, MA. MFS Value R6 made its debut in June of 2012, and since then, MEIKX has accumulated about $18.71 billion in assets, per the most up-to-date date available. The fund is currently managed by Nevin P. Chitkara who has been in charge of the fund since June of 2012.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. MEIKX has a 5-year annualized total return of 10.2%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.18%, which places it in the bottom third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 11.3%, the standard deviation of MEIKX over the past three years is 11.42%. The fund's standard deviation over the past 5 years is 13.87% compared to the category average of 12.81%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. MEIKX has a 5-year beta of 0.79, which means it is likely to be less volatile than the market average. 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's 5-year performance has produced a negative alpha of -1.59, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, MEIKX is a no load fund and it has an expense ratio of 0.44%.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

This puts this fund from MFS in the top 40% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Large Cap Value category.

Want even more information about MEIKX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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