Beth Foos: MFS Municipal Income (MFIAX) is a solid long-term option for investors looking for tax-free income. This fund is managed by a seasoned team that has delivered solid returns over the past decade at a very competitive price. With that, it earns a Morningstar Analyst Rating of Silver.
This team has seen some change recently--but it's not expected to shift the focus or the process of the fund dramatically. Veteran manager Geoff Schechter has been running this portfolio since 2000; in July 2015, Jason Kosty moved over from the research team to become his comanager here. Although he's new in the role, Kosty isn't new to the muni market; he has more than 19 years of experience behind him.
These two managers work closely with a team of seven dedicated research analysts to build this portfolio from the bottom up. They focus on finding mispriced pockets of the muni market and strong security selection to add value for investors. That work often results in the fund holding larger weights in lower-quality bonds than their competitors in the muni-national long Morningstar Category, but only when they see value there.
Over time, their convictions have paid off: This fund's returns have beaten more than half of its category peers in eight of the last 10 calendar years. And its 10-year annualized return of roughly 4.8% through the end of October is enough to beat 80% of its category rivals.
Investors looking for a solid tax-free income fund should take a closer look at MFS Municipal Income.