Sustainable Investing in Retirement Plans
October 24, 2019
Institutions & Consultants: 877-960-6077 Retirement Plan Advisors: 800-637-8730 US Retail: 800-343-2829 Non-US Retail: 800-738-3669(domestic) or +614-954-6540 (outside of US) Registered Investment Advisors: 800-637-228
The purpose of this presentation is to provide general investment education and information about the MFS Target Date Funds which may be an option in your retirement plan. The content of this presentation is not intended to serve as impartial investment or fiduciary advice. The content has been developed by the distributor of the MFS mutual funds which receives fees for distributing and servicing the funds and its parent company receives fees for providing advisory and other services.
Todd Leszczynski: Today I'd like to provide you with an overview of MFS, target date funds and the MFS Lifetime Funds.
MFS invented America's first mutual fund back in 1924, and today we actively manage equity and fixed income portfolios globally. We employ a unique investment approach through integrated research, global collaboration, and active risk management.
A common approach to investing includes the practice of A-D-R: allocation, diversification, and rebalancing. First, allocate assets across the major asset classes to help you pursue the optimal returns for the risk level you are willing to undertake.
Next, diversify within each asset class to take advantage of different investment styles and various market sectors so strong performance in one area minimizes downturns in another.
And finally, rebalance periodically to ensure that your plan remains in sync with your risk tolerance and to maintain your desired allocations
ADR is easy to put into practice with the help of your financial advisor. Working together, you can create and follow a strategic plan — one that can help you stay focused on your long-term goals and positioned to try to capture more of what the market has to offer.
One way to implement ADR is through investing in a target date fund. Target date funds offer you:
A target maturity date, which allows you to choose the time horizon that works for your goals consistent with the year in the fund's name
A broadly diversified portfolio, with a professional investment manager who changes the mix of stock and bond investments over time, to seek to grow your savings more early-on and help preserve them as the target date approaches
A glide path, which is the fund’s predetermined plan for changing the fund’s mix of investments over time, from being more heavily weighted toward stocks to more heavily weighted toward bonds
At MFS, we aim to construct a set of efficiently diversified portfolios – combining assets that maximize expected returns for given levels of expected risk.
The portfolios are comprised of US Equity, International Equity, Fixed Income, and the less traditional asset classes of Real Estate and Commodities. All underlying portfolios are MFS mutual funds.
Early on, we invest more in stocks, which are more growth-oriented, because when you have more time to invest, there is typically more opportunity to potentially grow your assets and recover from a market downturn.
We then shift more assets into conservative fixed income investments as you near retirement, because at this point there is less time to make up bigger losses that could happen with more growth-oriented investments in a market downturn.
If you’ve decided a target date strategy is right for you, you need to understand how to Pick-Your-Date. Each fund has a date in its name – we call this the fund’s target-date.
The target-date is the approximate year when you expect to retire and begin withdrawing from your account.
All you have to do is take the year you were born and add the age you will be when you plan to retire.
For example, if you were born in 1970 and plan to retire at 65, the retirement date is 2035. The target date strategy closest to that date is 2035. If your retirement plans change, you can always transfer your money to a target date strategy that more closely matches your revised retirement date. Work with your advisor or plan sponsor to learn more about how MFS Lifetime Funds can help simplify your path to retirement.
Please consider the important risk considerations of the funds.
IMPORTANT RISK CONSIDERATIONS
MFS Lifetime Income Fund: The fund may not achieve its objective and/or you could lose money on your investment in the fund. There is no guarantee that the fund will provide adequate income at and through your retirement.
MFS Lifetime 2020 - 2060 Funds: The fund may not achieve its objective and/or you could lose money on your investment in the fund. You may experience losses near, at, or after the target date. There is no guarantee of the fund's principal value, including at the target date, or that the fund will provide adequate income at and through your retirement.
Stock markets and investments in individual stocks are volatile and can decline significantly in response to issuer, market, economic, industry, political, regulatory, geopolitical, and other conditions.
Investments in debt instruments may decline in value as the result of declines in the credit quality of the issuer, borrower, counterparty, or other entity responsible for payment, underlying collateral, or changes in economic, political, issuer-specific, or other conditions. Certain types of debt instruments can be more sensitive to these factors and therefore more volatile. In addition, debt instruments entail interest rate risk (as interest rates rise, prices usually fall), therefore the Fund's share price may decline during rising rates. Funds that consist of debt instruments with longer durations are generally more sensitive to a rise in interest rates than those with shorter durations. At times, and particularly during periods of market turmoil, all or a large portion of segments of the market may not have an active trading market. As a result, it may be difficult to value these investments and it may not be possible to sell a particular investment or type of investment at any particular time or at an acceptable price. The price of an instrument trading at a negative interest rate responds to interest rate changes like other debt instruments; however, an instrument purchased at a negative interest rate is expected to produce a negative return if held to maturity.
Investments in foreign markets can involve greater risk and volatility than U.S. investments because of adverse market, currency, economic, industry, political, regulatory, geopolitical, or other conditions.
MFS’ strategy of investing in underlying funds exposes the fund to the risks of the underlying funds. Each underlying fund pursues its own objective and strategies and may not achieve its objective.
Please see the prospectus for further information on these and other risk considerations.
Before investing, consider the fund's investment objectives, risks, charges, and expenses. For a prospectus, or summary prospectus, containing this and other information, contact your investment professional or view online at mfs.com. Please read it carefully.
MFS Fund Distributors, Inc., 111 Huntington Avenue, Boston, MA 02199
Target-Date Fund definition: A mutual fund in the hybrid category that automatically resets the asset mix of stocks, bonds and cash equivalents in its portfolio according to a selected time frame that is appropriate for a particular investor.
These funds automatically rebalance their holdings over time, shifting from more aggressive
investments early to more conservative investments as the target date nears. The MFS Lifetime
Income Fund is geared toward investors who have already reached their target dates. The principal value of the fund options are not guaranteed at any time; the funds' objectives and investment strategies change from one target date to another.
No investment strategy, including asset allocation, diversification or rebalancing, can guarantee a profit or protect against a loss.
This material is provided for general and educational purposes only and is not investment advice. The investments you choose should correspond to your financial needs, goals, and risk tolerance. Please consult an investment professional before making any investment or financial decisions or purchasing any financial, securities or investment related service or product, including any investment product or service described in these materials.
MFS Fund Distributors, Inc., 111 Huntington Avenue, Boston, MA 02199 39351.2