MFS Will Merge Bond Funds
March 13, 2000
MFS Investment Management of Boston is asking shareholders to approve the merger of the MFS Intermediate Income Fund into the MFS Limited Maturity Fund, according to a proxy statement filed with the SEC March 1. If shareholders approve the proposal at a meeting scheduled for May 18, it will mark the first fund merger for MFS since 1992, said David Oliveri, an MFS spokesperson.
Fixed-income funds had net redemptions of $5 billion last year, according to the Investment Company Institute. There were $75 billion in net sales in 1998, according to the ICI.
The funds' directors cited overlap in the funds' investment objectives and reducing expenses as reasons for proposing the merger, according to the proxy statement. Limited Maturity also is more recognized by investors and intermediaries, making it harder for Intermediate Income to raise assets, according to the proxy statement.
The Intermediate Income Fund had a return of -5.61 percent in 1999, Oliveri said. The fund has assets of approximately $104 million. Limited Maturity has assets of roughly $198 million and had a return of 0.37 percent last year, Oliveri said.