MFS Charter Income Trust (NYSE: MCR) is a closed-end management investment company that seeks to provide high current income and capital appreciation. Managed by MFS Investment Management, the fund pursues its objectives through a diversified portfolio of fixed-income and convertible securities. It aims to deliver attractive risk-adjusted returns by blending income-generating assets with the potential for equity-linked upside.
The trust’s holdings span a broad spectrum of debt instruments, including U.S. and non-U.S. high-yield corporate bonds, emerging-market debt, bank loans and preferred securities. Convertible securities—bonds or preferred shares that can be exchanged for equity—feature prominently, offering both income and the possibility of capital gains. The fund may also allocate to government obligations and investment-grade corporate debt to manage credit risk and complement its higher-yielding positions.
To enhance its income-generation capability, MFS Charter Income Trust employs leverage, raising capital through borrowings and preferred share issuances. The fund’s distribution policy targets monthly payouts, drawing from net investment income and, when necessary, realized capital gains. Its closed-end structure allows portfolio managers to invest without the constraints of daily cash flows, enabling more efficient deployment of leverage and tactical asset allocation.
Since its inception in 2003, the trust has relied on MFS’s global research platform and experienced fixed-income team. Portfolio decisions are overseen by a group of seasoned professionals, including lead managers versed in credit analysis and convertible markets. While headquartered in Boston, the fund’s investment remit extends worldwide, with dedicated research coverage across North America, Europe and emerging markets. This global footprint, combined with MFS’s long history in active bond management, underpins the trust’s strategy of seeking compelling yield opportunities across multiple regions.
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