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Cautious Stance Suits MFS Utilities

Utilities picks, as well as cash, help fund.

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MFS Utilities Fund (MMUFX) is usually above average, and 2001 is proving to be no exception so far. Its 2.2% loss through May 17, 2001, doesn't look all that great in absolute terms, but it's good enough to nudge the fund into the utility category's top half. 

Manager Maura Shaughnessy is still overweighting utility picks such as pipeline operator El Paso (ELP) and power-generator operator Calpine (CPN), which she thinks will stand to benefit from the country's ongoing power shortage. However, the fund is benefiting most from Shaughnessy's relatively cautious stance right now. She has let cash and bonds drift up a bit lately, simply because she's not finding many opportunities in the sector these days. Energy and utilities are looking a bit rich following their great recent run, she says, and she still doesn't see too many bright spots among telecom stocks. However, she has nibbled at cable stocks, such as Comcast (CMCSK), because of their consistency of earnings and decreasing competition from satellites and cable modems.

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Catherine Hickey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.