MFS FIXED INCOME

What If You Could Take Your Fixed Income Further?

Consider Diversifying Alpha
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  • Assess Managers

    Are You Invested With Too Few Fixed Income Managers?

    Typically, investors are 70% less diversified in their fixed income manager allocation than in their equity manager allocation.

    fixed income managers

    equity portfolio managers

    Source: Broadridge, 2/28/25; Morningstar categories map into four broad asset classes (US Stock, International Stock, Taxable Bond and Municipal Bond).

    Key Takeaway

    Allocating to fewer managers may increase the possibility of investing in similarly managed funds that will perform similarly – and expose portfolios to fewer opportunities in changing markets.

  • Are Your Fixed Income Managers Primarily Duration - Focused?

    Duration-focused managers make decisions based on correctly forecasting interest rate changes, which narrows outcomes to two possibilities—getting it right or not.

    graphic depicting overweight duration where a duration focused manager may forecast interest rates will fall and underweight duration with the expectation interest rates will rise

    Predicting interest rates is not easy, yet many managers rely heavily on duration to generate returns, potentially leading to lost opportunities.

    How About Credit-Focused Managers?

    Credit-focused managers make decisions based on fundamental research across sectors, securities and quality.

    graphic showing the three parts of credit lever as quality, sector allocation and security selection

     

     

    Key Takeaway

    Relying on a broad range of factors to generate returns can help managers pursue more consistent through-cycle alpha.

  • Credit And Duration: Ready To Take Advantage Of Both?

    Using a hypothetical 50/50 allocation to duration and credit managers has paid off

    Excess Return Over the Bloomberg US Aggregate Index 12/31/2014–12/31/2024

    Source: Morningstar as of 12/31/2024. Includes the ten largest managers in the core plus category based on AUM. Four credit managers that use the credit alpha lever are shown in the credit category and six managers that exhibited the greatest range of duration positioning and showed persistent duration bias over the last five years are shown for the duration category. The duration and credit blend equally weights the ten funds for a total of 100%. Hypothetical credit and duration portfolios gross cumulative returns benchmarked against the Bloomberg US Agg Bond TR USD. The portfolio-level performance returns shown are hypothetical, based on historic economic and market assumptions.

     

    This data is not intended to represent the performance of any MFS fund and no MFS funds are included in the hypothetical portfolios.
    Hypothetical performance is for illustrative purposes only and is not a guarantee of future results. The information presented is based upon hypothetical assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in calculating returns have been stated or fully considered. Hypothetical performance is developed with the benefit of hindsight (i.e., actual knowledge of market conditions, results of similar strategies) and thus has many inherent limitations. Actual performance returns will vary.

     

    Past performance is no guarantee of future results.
    Key Takeaway

    In complex and changing bond markets, adding or investing in another performance driver such as credit offers the potential for more consistent alpha generation.

    Take Your Fixed Income Further

    teal checkbox ASSESS
    fixed income managers

    teal checkbox CONSIDER
    performance drivers

    teal checkbox DIVERSIFY
    alpha

    teal checkbox EXPLORE
    credit- and duration-focused funds

    MFS Core Plus Funds

    MFIIX income fund

    MRBIX total return bond fund

    MQLIX limited maturity fund

    MBDIX corporate bond fund

    Past performance is no guarantee of future results.

    Key Takeaway

    Relying on our deep fundamental research and global investment platform, MFS leverages primarily credit and to a lesser degree duration to generate returns through changing market dynamics.

     

    Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested.

     

    A prospectus for any of the MFS products is available by mail or download. The prospectus should be read carefully as it contains complete information on the fund's investment objective(s), the risks associated with an investment in the fund, the fees, charges, and expenses involved, as well as other information about the fund. These elements, as well as other information contained in the prospectus, should be considered before investing. These products are available for sale only within the United States.

Are You Invested With Too Few Fixed Income Managers?

Typically, investors are 70% less diversified in their fixed income manager allocation than in their equity manager allocation.

fixed income managers

equity portfolio managers

Source: Broadridge, 2/28/25; Morningstar categories map into four broad asset classes (US Stock, International Stock, Taxable Bond and Municipal Bond).

Key Takeaway

Allocating to fewer managers may increase the possibility of investing in similarly managed funds that will perform similarly – and expose portfolios to fewer opportunities in changing markets.

Are Your Fixed Income Managers Primarily Duration - Focused?

Duration-focused managers make decisions based on correctly forecasting interest rate changes, which narrows outcomes to two possibilities—getting it right or not.

graphic depicting overweight duration where a duration focused manager may forecast interest rates will fall and underweight duration with the expectation interest rates will rise

Predicting interest rates is not easy, yet many managers rely heavily on duration to generate returns, potentially leading to lost opportunities.

How About Credit-Focused Managers?

Credit-focused managers make decisions based on fundamental research across sectors, securities and quality.

graphic showing the three parts of credit lever as quality, sector allocation and security selection

 

 

Key Takeaway

Relying on a broad range of factors to generate returns can help managers pursue more consistent through-cycle alpha.

Credit And Duration: Ready To Take Advantage Of Both?

Using a hypothetical 50/50 allocation to duration and credit managers has paid off

Excess Return Over the Bloomberg US Aggregate Index 12/31/2014–12/31/2024

Source: Morningstar as of 12/31/2024. Includes the ten largest managers in the core plus category based on AUM. Four credit managers that use the credit alpha lever are shown in the credit category and six managers that exhibited the greatest range of duration positioning and showed persistent duration bias over the last five years are shown for the duration category. The duration and credit blend equally weights the ten funds for a total of 100%. Hypothetical credit and duration portfolios gross cumulative returns benchmarked against the Bloomberg US Agg Bond TR USD. The portfolio-level performance returns shown are hypothetical, based on historic economic and market assumptions.

 

This data is not intended to represent the performance of any MFS fund and no MFS funds are included in the hypothetical portfolios.
Hypothetical performance is for illustrative purposes only and is not a guarantee of future results. The information presented is based upon hypothetical assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in calculating returns have been stated or fully considered. Hypothetical performance is developed with the benefit of hindsight (i.e., actual knowledge of market conditions, results of similar strategies) and thus has many inherent limitations. Actual performance returns will vary.

 

Past performance is no guarantee of future results.
Key Takeaway

In complex and changing bond markets, adding or investing in another performance driver such as credit offers the potential for more consistent alpha generation.

Take Your Fixed Income Further

teal checkbox ASSESS
fixed income managers

teal checkbox CONSIDER
performance drivers

teal checkbox DIVERSIFY
alpha

teal checkbox EXPLORE
credit- and duration-focused funds

MFS Core Plus Funds

MFIIX income fund

MRBIX total return bond fund

MQLIX limited maturity fund

MBDIX corporate bond fund

Past performance is no guarantee of future results.

Key Takeaway

Relying on our deep fundamental research and global investment platform, MFS leverages primarily credit and to a lesser degree duration to generate returns through changing market dynamics.

 

Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested.

 

A prospectus for any of the MFS products is available by mail or download. The prospectus should be read carefully as it contains complete information on the fund's investment objective(s), the risks associated with an investment in the fund, the fees, charges, and expenses involved, as well as other information about the fund. These elements, as well as other information contained in the prospectus, should be considered before investing. These products are available for sale only within the United States.

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