MFS Institutional Advisors, Inc. (“MFSI”), an investment adviser registered with the SEC, has been serving institutional investors and their consultants since 1986. MFSI is a wholly‐owned subsidiary of Massachusetts Financial Services Company, d/b/a MFS Investment Management (“MFS”), which is also an investment adviser registered with the SEC. MFS is also the parent company of other companies that manage investments. In this Brochure, we refer to MFS and these other direct and indirect subsidiaries collectively as the “MFS Global Group.” MFS and its predecessor organizations have a history of money management dating from 1924 and the founding of the first U.S. mutual fund. MFS is an indirect, majority owned subsidiary of Sun Life Financial Inc. (“SLF”), a diversified financial services company. As of December 31, 2018, MFSI managed $93,565,942,000 in discretionary client assets and $24,650,048,000 in non‐discretionary client assets. The MFS Global Group managed $450,901,534,000 as of December 31, 2018. All discussions of MFSI’s practices in this Brochure are qualified in their entirety with respect to each institutional portfolio by the applicable investment management agreement or offering and organizational materials (“Offering Documents”), respectively, governing such portfolio, including without limitation, all practices pertaining to the portfolio’s investments, strategies used in managing the portfolio, investment risks, fees and other costs associated with an investment in the portfolio, and conflicts of interest faced by MFSI and its affiliates in connection with the management of the portfolio. MFSI primarily provides investment advisory services to institutional clients, particularly separate accounts. Clients may impose restrictions on investing in certain securities, derivatives or types of securities or derivatives. In addition, MFSI provides sub‐advisory services to pooled investment vehicles. For information on the types of strategies MFSI manages, please see Item 8, Methods of Analysis, Investment Strategies and Risk of Loss. MFSI may, on a non‐discretionary basis, review and provide asset allocation guidance to certain institutional clients, including pension plans, sovereign wealth funds, endowments and foundations. MFSI may also provide similar asset allocation guidance to financial intermediaries. These services are typically provided to existing institutional clients and financial intermediaries without additional charge and without a contractual agreement. MFSI provides these services on a non‐discretionary basis, which means that the institutional client or financial intermediary has the ultimate discretion to accept none, some or all of MFSI’s guidance. Additionally, MFSI’s guidance is based on information provided from the institutional client or financial intermediary, reflects advice given as of a particular point in time, and, when provided to a financial intermediary, is not intended to meet the needs of any particular financial intermediary client. MFSI and/or its affiliates receive revenue from their investment products and services. To the extent MFSI’s asset allocation guidance could be implemented using products or services provided by the MFS Global Group, and the recipient of the guidance invests in such products or services, the MFS Global Group may earn additional revenues. Therefore, MFSI has a potential conflict of interest to the extent its asset allocation guidance results in the inclusion of any MFS Global Group products or services. The institutional client or financial intermediary has the ultimate discretion whether to use MFS Global Group products or services. MFSI also provides advisory services through certain wrap fee programs (“Wrap Programs”) whose participants include individual as well as institutional investors. Finally, separate and apart from Wrap Programs, MFSI also provides non‐discretionary, model portfolios to institutional clients, including other investment advisers. Wrap Programs Some Wrap Programs are offered as separately managed accounts (an “SMA Program”) while others are offered as model‐delivery portfolios (a “Model‐Delivery Program”). In an SMA Program MFSI has authority to make all investment decisions; whereas in a Model‐Delivery Program, the sponsor has the ultimate authority to accept or reject MFSI’s recommendations. The two types of Wrap Programs are described in more detail below and throughout the Brochure. Please see: Item 5, Fees and Compensation, for information concerning how MFSI is compensated for providing advisory services through a Wrap Program; Item 8, Methods of Analysis, Investment Strategies and Risk of Loss, for information regarding the differences between how MFSI manages Wrap Program portfolios and other portfolios; and Item 12, Brokerage Practices, for information on Wrap Program trading practices.
SMA Programs
SMA Program arrangements may be either “bundled” or “dual‐contract.” In a bundled arrangement, a participant enters into an advisory agreement with the sponsor and the sponsor enters into a sub‐advisory agreement with MFSI. Under a bundled SMA Program, MFSI is retained by the Wrap Program sponsor and participants select MFSI from among the investment advisers that the sponsor presents to them. Under a bundled SMA Program, the participant generally pays a bundled or wrap fee to the sponsor that covers services such as advisory, trading and custodial services and the sponsor directs a portion of that fee to MFSI for its services. In a dual‐contract SMA Program, a participant enters into an investment advisory agreement with MFSI and a separate agreement with the program sponsor. Under a dual‐contract SMA Program, participants contract for MFSI’s advisory services directly with MFSI after selecting MFSI from among the investment advisers presented by the sponsor and the participant pays MFSI directly for its advisory services. Participants should consult their sponsor’s Wrap Fee Program Brochure for additional information about the services provided through their program by the sponsor and related fees and expenses associated with the program. In bundled SMA Programs, the selection of MFSI’s strategy is generally based upon the compatibility, in the judgment of the sponsor and/or the participant, of MFSI’s style of investment management and performance with the participant’s investment objectives and risk tolerance. Additionally, the sponsor together with the program participant, and not MFSI, are generally responsible for determining that a particular Wrap Program is appropriate for each particular participant. MFSI reserves the right, in its sole discretion, to reject for any reason any participant referred to it. Conversely, a participant may terminate its selection of MFSI as investment manager in a Wrap Program at any time, upon notice either to the sponsor of a bundled Wrap Program or, in the case of a dual‐contract program, directly to MFSI. Some participants in SMA Programs elect to impose restrictions upon MFSI’s ability to recommend or implement investments. Such restrictions must be communicated to and accepted by MFSI as reasonable. Reasonable restrictions can include certain securities or certain types of securities, as well as reasonable sector‐based restrictions, such as environmental, social and governance (“ESG”) or socially responsible investing (“SRI”) category restrictions. Participants typically select sector‐based restrictions from among the sponsor’s pre‐established restricted categories. Sponsors do not usually provide MFSI with a list of the securities included in their restricted categories. Therefore, in order to apply such restrictions, MFSI utilizes a third‐party vendor to provide information regarding securities that are included in a comparable restricted category. MFSI uses its sole discretion to select the vendor category that most closely approximates the sponsor’s restricted category based on the information MFSI receives from the third‐ party vendor. Although MFSI believes the information provided by the vendor is reliable, MFSI does not independently verify the information or guarantee its accuracy. In some cases, MFSI may utilize a restricted security list from a sponsor to implement restrictions from participant’s associated with that sponsor, rather than a third‐party vendor. Because MFSI relies on third party information to identify securities in a restricted category, the securities MFSI applies as restricted for a given category could differ from those which the sponsor may have considered to be within that category (i.e., MFSI’s list of restricted securities for a category may be more or less restrictive). These restrictions affect MFSI’s freedom of action and, consequently, may affect portfolio performance.
Model‐Delivery Programs
In Model‐Delivery Programs, MFSI is retained by the Wrap Program sponsor to provide research and portfolio recommendations, which take the form of a portfolio model related to a particular strategy and not tailored to any program participant. The sponsor retains full discretion to accept, modify or reject such recommendations and the sponsor (or a third party retained by the sponsor to perform services for the program, such as an overlay manager) is generally responsible for implementing the ultimate investment decisions. MFSI does not know the identity of, or any other pertinent information about, the program participants for whose portfolios the sponsor has elected to use MFSI’s portfolio model. Additionally, as discussed above, MFSI does not have any contractual arrangement with program participants. The sponsors of (and not any participant in) Model‐Delivery Programs have the contractual relationship with MFSI. As with bundled SMA Programs, the participant generally pays a bundled or wrap fee that covers services such as advisory, trading and custodial services to the sponsor and a portion of that fee is directed to MFSI for its services. The sponsors, together with the program participants, are solely responsible for determinations as to whether the program and any MFSI model is appropriate for a participant. Unlike in SMA Programs, reasonable participant‐imposed restrictions are managed by the sponsor at the program level and MFSI is not required to take into account any participant’s restrictions in designing or updating a model, nor is MFSI expected to implement any such restrictions or assist the sponsor in determining how to implement such restrictions. Nonetheless, as with SMA Programs, to the extent that a restriction impacts the securities recommended by MFSI to be included in portfolios following a model, a participant’s decision to impose restrictions would affect the performance of a participant’s portfolio as compared to participants who have not imposed such restrictions.
Lead Style Manager Services
MFSI serves as the lead style manager for a portfolio in the Merrill Lynch, Pierce Fenner & Smith Incorporated (“Merrill Lynch”) CDP Investment Advisory program. As lead style manager, MFSI is responsible for identifying, when needed, appropriate style managers from a Merrill Lynch approved list of possible managers. MFSI proposes such a manager to Merrill Lynch and Merrill Lynch approves the proposed style managers. While MFS is responsible for identifying an appropriate style manager any time a new manager is needed, the existing style manager will be maintained until such time as it is no longer on Merrill Lynch’s approved list. please register to get more info

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