Formally, Maura Shaughnessy has close to US$1 billion, or 35 percent of her fund's portfolio, invested in foreign utilities. But these days, with a power crisis in parts of the US, she figures that there is much less reason to look overseas. So Shaughnessy, who runs the US$2.66 billion MFS Utilities fund, has trimmed her international holdings to just 15 percent of the fund's assets, the lowest level since December 1996.
"Nowhere is quite as bad as California, but over all the electricity infrastructure in the US hasn't been built to the levels that it should have been," Shaughnessy, 39, said from her Boston office, which overlooks the Charles River. "The shortage of generation has allowed the price of electricity to rise because of strong demand, and companies with power to sell have been able to take advantage of it."
The electricity shortage has helped the fund's returns. The portfolio gained 14.3 percent a year, on average, for the three years through Thursday, versus 10 percent for its peers in the utility group and 6.5 percent for the Standard & Poor's 500, according to Morningstar Inc.
Utilities have traditionally paid substantial dividends, but those payouts have shrunk in recent years. To beef up yields, Shaughnessy buys a mix of utility bonds, convertible securities and Treasury issues equal to about 20 percent of the fund's assets. That helps to generate the fund's relatively high yield, which was 3.81 percent for the 12 months through April. The utility group tracked by Morningstar yields an average of 2.02 percent.
The stock portion of the portfolio is divided among natural gas, electric utility and telecommunications stocks. Shaughnessy tries to reduce risk by diversifying among companies of different sizes and among countries.
She describes her investment style as growth at a reasonable price, with a focus on relative value. "We buy stocks whose prices look reasonable compared to their peers, earnings and history," she said. She uses the same approach with a more diversified group of stocks in the US$6.19 billion MFS Capital Opportunities fund.
Eight MFS industry analysts work with her to pick the 150 or so stocks in the funds. She also relies on her more than 13 years of utilities investing at MFS and the Harvard Management Co.
Most important, she said, is understanding the various regulatory environments in which the companies operate, because most are regulated at the state level. She looks for companies that have strong management with proven records -- and, preferably, with significant stock ownership. "There's been deregulation going on for several years now," she said. "In a deregulating environment, it's important to find management that can run utilities like real businesses."
Energy companies typically are mature businesses, with steady earnings and a relatively long track record, Shaughnessy said.
"So I'm looking at whether the growth rates are accelerating," she said, "and how the stock trades relative to its expected growth.''
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
‘OF COURSE A COUNTRY’: The president outlined that Taiwan has all the necessary features of a nation, including citizens, land, government and sovereignty President William Lai (賴清德) discussed the meaning of “nation” during a speech in New Taipei City last night, emphasizing that Taiwan is a country as he condemned China’s misinterpretation of UN Resolution 2758. The speech was the first in a series of 10 that Lai is scheduled to give across Taiwan. It is the responsibility of Taiwanese citizens to stand united to defend their national sovereignty, democracy, liberty, way of life and the future of the next generation, Lai said. This is the most important legacy the people of this era could pass on to future generations, he said. Lai went on to discuss
MISSION: The Indo-Pacific region is ‘the priority theater,’ where the task of deterrence extends across the entire region, including Taiwan, the US Pacific Fleet commander said The US Navy’s “mission of deterrence” in the Indo-Pacific theater applies to Taiwan, Pacific Fleet Commander Admiral Stephen Koehler told the South China Sea Conference on Tuesday. The conference, organized by the Center for Strategic and International Studies (CSIS), is an international platform for senior officials and experts from countries with security interests in the region. “The Pacific Fleet’s mission is to deter aggression across the Western Pacific, together with our allies and partners, and to prevail in combat if necessary, Koehler said in the event’s keynote speech. “That mission of deterrence applies regionwide — including the South China Sea and Taiwan,” he
UNPRECEDENTED: In addition to the approved recall motions, cases such as Ma Wen-chun’s in Nantou are still under review, while others lack enough signatures The Central Election Commission (CEC) announced yesterday that a recall vote would take place on July 26, after it approved the first batch of recall motions targeting 24 Chinese Nationalist Party (KMT) lawmakers and Hsinchu Mayor Ann Kao (高虹安). Taiwan is in the midst of an unprecedented wave of mass recall campaigns, following a civil society push that echoed a call made by Democratic Progressive Party (DPP) caucus whip Ker Chien-ming (柯建銘) in January to initiate signature drives aimed at unseating KMT legislators. Under the Civil Servants Election and Recall Act (公職人員選舉罷免法), Taiwanese can initiate a recall of district-elected lawmakers by collecting
RSS