"Of Mutual Interest" - MFS Massachusetts Portfolio Manager, T. Kevin Beatty
Tuesday, March 10, 2009PAUL KANGAS: America's first mutual fund is gearing up for its 85th birthday. MFS Massachusetts Investors Trust celebrates that milestone next week. While the fund's down 42 percent over the past year, it has a solid long-term record, with an average annual gain of 8.3 percent since inception. I recently spoke with the fund's portfolio manager, T. Kevin Beatty, as part of our "Of Mutual Interest" coverage and began by asking him how the fund has fared in past recessions.
T. KEVIN BEATTY, PORTFOLIO MANAGER, MFS MASSACHUSETTS INVESTORS TRUST: We have done pretty well through a number of different downturns and even up markets as well. I don't think there is too many parallels to this than what some of the worst times were because we've had swift and global response.
KANGAS: MIT focuses on large-cap, high-quality companies and you seem to be pretty defensive with a portfolio heavy in health care, technology and consumer staples. Will those sectors lead the market higher?
BEATTY: We think that they'll do pretty well here. We don't take a top-down view of the world, so we haven't said this is a conservative fund. What we do is look at it from the bottoms up and it doesn't surprise us that we have a lot of holdings in those sectors.
KANGAS: Any specific stocks that you particularly like?
BEATTY: In the health care arena, Abbott Labs (ABT) is one of the names that we like quite a lot. This is a well diversified company not specific to any product or procedure that probably has earning growth at probably double digits through 2012 and for that you're paying just a little bit over a market multiple.
KANGAS: OK. How about something other than that?
BEATTY: In the technology area, we do like Cisco (CSCO). Cisco is something that's deeply in the middle of delivering data to not only the enterprise but to personal people at home and everyone wants more data. It's an extremely well run company, managed quite well and again, nice earnings growth over the long-term and you are only paying a little bit more than a market multiple.
KANGAS: How about a third choice?
BEATTY: In staples, one of the companies we like a lot is Colgate (CL). Colgate is a terrific company with a great brand that's really well run. They've got great geographic breadth and participate in the emerging markets with big, big market shares that no one is going to be stealing any time soon.
KANGAS: Do you personally own these three stocks Kevin?
BEATTY: I own a lot of MFS, Massachusetts Investors Trust.
KANGAS: So indirectly you do?
BEATTY: That's correct.
KANGAS: Kevin, we just have less than a minute left. Your fund is 84 percent in American stocks. Are U.S. companies better than foreign stocks in your opinion now?
BEATTY: We don't really think about it U.S. vs. non-U.S. The reason we own some stocks outside of the U.S. is because we have a great global research team that we like to take advantage of.
KANGAS: The current market has some questions regarding the buy-and- hold strategy. If someone had invested in MIT (sic) 85 years ago and stuck with it, how would they have done, briefly now?
BEATTY: The numbers turn out that if you invested $10,000 back at the beginning of the fund you would have about $9.5 million.
KANGAS: Not bad, Kevin, I want to thank you for being with us and congratulations to you and MFS funds on this milestone.
BEATTY: Thanks very much Paul.
KANGAS: My guest Kevin Beatty of Massachusetts Investors Trust.
