Global investment firm MFS is enhancing key aspects of its collective investment trust (CIT) line to better meet plan sponsor and investor needs.
Changes to the unit class structure, lower investment minimums, and reductions in management fees or expense caps on several CIT funds are expected to increase the firm’s market competitiveness according to a release. The firm is also adding increased pricing flexibility for mandates over $200 million.
“We believe these enhancements further align MFS with the needs of retirement plan fiduciaries and participants and ensure the firm’s long‐term competitiveness in the US retirement marketplace,” says Sean Kenney, MFS’s managing director for Defined Contribution.
Highlights of the enhancements include:
- MFS will now have Class 2, Class 3, and Class 4 unit‐class offerings, with investment minimums of $0, $50 million, and $100 million, respectively.
- They will create dedicated unit classes for mandates above $200 million and certain sub-advised and OCIO opportunities.
- MFS is dropping the expense cap from 10 basis points to 5 basis points on four international equity CITs.
“The new unit class structure provides the flexibility required to align with larger, more complex plan sponsor mandates, especially those driven by subadvisory and OCIOs, while providing a compelling value proposition to small and mid‐size plans,” notes Kenney.
He also sees the defined contribution market growing in complexity year over year and that the new enhancements will address plan fiduciaries’ and participants’ evolving needs.”
MFS offerings dovetail with education efforts
MFS was part of a leadership panel last year that aimed to assist 401k-focused advisors to better explain to plan sponsors the benefits of CITs. Overall, MFS manages more than $10.2 billion in 19 CIT funds across the U.S., international, global, and emerging market equities.
At the time, MFS’s Jessica Scalfani noted that the firm has “a long history of offering CITs and we understand how they can offer potential benefits to plan sponsors and their participants.”
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
