On September 24, 2025, MFS Funding Administration launched the MFS Lively Mid Cap ETF (MMID), bringing one of many agency’s most seasoned mid-cap methods into the ETF wrapper. The fund represents an easy translation of MFS Mid Cap Worth – a technique portfolio supervisor Kevin Schmitz has managed since 2008 – right into a extra tax-efficient and accessible construction. What distinguishes MMID is just not novelty however pedigree: a 17-year monitor document, a supervisor who joined MFS as an fairness analyst in 2002 and has spent greater than twenty years refining his craft, and an funding self-discipline that balances basic evaluation with valuation consciousness with out resorting to leverage, derivatives, or sector timing.
The technique seeks what Schmitz describes as “enterprise high quality and sturdiness” – traits he believes are sometimes missed within the mid-cap area. The strategy combines bottom-up basic analysis (drawing on MFS’s 300+ funding professionals) with a concentrate on free money circulation per share progress as the first driver of long-term returns. This isn’t a pure worth fund chasing the most cost effective shares, nor a progress fund prepared to pay any value for momentum. As an alternative, it occupies that center floor the place corporations have established enterprise fashions and aggressive positions however haven’t but commanded the premium multiples of large-cap darlings. The portfolio sometimes holds 40-60 positions with modest turnover (the mutual fund model exhibits 27% annual turnover), suggesting a affected person strategy to constructing positions and permitting these to play out.
MFS brings appreciable credibility to this effort. The agency launched the primary U.S. mutual fund in 1924 and manages $644 billion throughout its platform. Whereas MFS entered the ETF area solely in December 2024, it has taken a conservative strategy: changing confirmed mutual fund methods somewhat than creating new merchandise. The parallel mutual fund technique (out there in a number of share courses, together with MCVIX and MVCKX) manages over $17 billion and earned Morningstar’s Gold ranking as of late 2025, together with a four-star total ranking and “Above Common Folks” and “Excessive Course of” pillar rankings. Morningstar analyst David Carey famous in October 2025 that the fund’s “succesful managers and best-in-class strategy” merited these elevated assessments.
The fund has a type of T. Rowe Value vibe to it – a fairly constant singles hitter that not often strikes out. A detailed take a look at the technique’s efficiency metrics over the previous 16 years results in phrases like strong, smart, self-aware, and dependable. Amongst 30 mid-cap worth funds with monitor information extending again to 2009, the MFS technique ranks within the prime quartile for risk-adjusted returns (Sharpe ratio of 0.64, sixth-best within the peer group) whereas delivering above-average absolute returns (11.6% yearly, seventh-best, and about 0.9% above its friends). The utmost drawdown of -30.9% sits squarely in the course of the pack – neither particularly protecting nor particularly susceptible. The seize ratios inform an analogous story; it’s a bit higher in each up and down markets than its Lipper friends. It captures: 94% of the S&P500’s beneficial properties in up durations (93% for friends), 107% of its losses in down durations (112% for friends). This isn’t a fund that may shoot the lights out or present distinctive draw back safety. It’s a fund that exhibits up, does the work, and delivers respectable outcomes yr after yr.
We charted MFS towards the iShares Russell Mid-cap Worth ETF (IWS) for the 16 years because the present MFS staff settled in. The MFS and Russell Midcap Worth traces monitor one another intently for a lot of the 16-year journey, not often diverging dramatically. However by November 2025, that preliminary funding had grown to $77,373 within the MFS fund versus $68,410 within the index – roughly $9,000 of extra wealth created not by heroic outperformance however by the quiet compounding of constant, modest edge.
Since Taylor and Schmitz formed the portfolio to their liking in January 2009, the mutual fund’s 12.8% annualized return by September 2025 barely edged the Russell Midcap Worth Index’s 12.5%. Impressively, the fund has by no means completed within the backside quartile of the mid-cap worth class in any calendar yr since 2009 – a testomony to the managers’ consistency if not their capacity to ship distinctive safety throughout market stress.
Doubters may look at 2025’s outcomes and conclude the technique has misplaced its edge. By means of November, the fund’s institutional share class gained 6.1% towards the index’s 9.25% rise, lagging 73% of mid-cap worth friends. Three holdings – Newell Manufacturers, Ashland, and Teleflex – fell greater than 30% and weighed on returns. Maybe extra considerably, the managers’ refusal to personal richly valued names like Robinhood and Coinbase, two of the index’s largest and best-performing constituents, value them dearly in relative phrases. However that is exactly the self-discipline that has saved the fund from touchdown within the backside quartile over practically twenty years. The managers are prepared to simply accept short-term underperformance somewhat than chase costly shares into harmful valuations. As Morningstar’s David Carey famous in his October 2025 evaluation, “Whereas the current efficiency stings, the managers are sticking to their time-tested strategy, and long-term traders needs to be rewarded.”
The underside line
MMID prices 0.59% yearly, 40 bps lower than the fund’s retail “A” shares, and has gathered roughly $26 million in property since launch. For traders looking for mid-cap publicity by energetic administration, this fund warrants critical consideration.
The mid-cap area has traditionally provided higher risk-adjusted returns than giant caps with solely modestly greater volatility, and it stays underrepresented in lots of portfolios regardless of constituting roughly 15% of market capitalization in cap-weighted indices. An investor trying so as to add devoted mid-cap publicity – whether or not as an alternative choice to a portion of their large-cap core holdings, as a complement to present large-cap and small-cap positions, possibly as a tactical chubby to an underappreciated market section – owes it to themselves to place MMID on their shortlist for additional analysis. The 17-year document of the parallel mutual fund offers substantial proof for evaluating how this self-discipline performs throughout market cycles: constant, competent, not often sensible, virtually by no means disastrous. It’ll, I feel, show a compelling choice for traders who worth reliability over flash and who’re constructing portfolios meant to compound steadily somewhat than swing for the fences.
