MFS Releases Closed-End Fund Income Distribution Sources for Certain Funds
MWN-AI** Summary
MFS Investment Management has released income distribution information for five of its closed-end funds for May 2025. The funds include MFS Charter Income Trust (MCR), MFS Government Markets Income Trust (MGF), MFS Intermediate High-Income Fund (CIF), MFS Intermediate Income Trust (MIN), and MFS Multimarket Income Trust (MMT). Key details about each fund's distributions for the month have been made available on the MFS website under “Products & Strategies” and “Closed End Funds.”
In May 2025, MFS Charter Income Trust declared a distribution of $0.04390 per share, with total cumulative distributions for the fiscal year amounting to $0.26968 per share. The breakdown of its current distribution indicates that 100% came from return of capital. The average annual total return over the past five years is reported at 4.05%, while the annualized current distribution rate stands at 7.93%.
For MFS Government Markets Income Trust, the distribution for May was set at $0.01934 per share, with a slight reliance on return of capital making up a notable portion of its distributions. The fund has an average annual total return of -0.60% over five years.
MFS Intermediate High-Income Fund reported a distribution of $0.01404 per share, where 53% of this distribution was from return of capital. MFS Intermediate Income Trust and MFS Multimarket Income Trust also exhibited similar patterns, drawing significant portions from returns of capital.
All the funds operate under a managed distribution plan, meaning they may release long-term capital gains or returns of capital instead of relying solely on net investment income. MFS emphasizes that distributions should not solely be viewed as indications of the fund's investment performance. For tax purposes, actual amounts may vary based on investment experiences during the fiscal year.
MWN-AI** Analysis
MFS Investment Management's recent announcement regarding the distribution income sources for its closed-end funds underscores key trends that investors should consider.
For May 2025, the MFS Charter Income Trust (MCR) disclosed a distribution per share of $0.04390, with 100% sourced from Return of Capital (ROC). This raises potential red flags. Reliance on ROC as a primary distribution source can signal a fund's inability to generate sufficient net investment income (NII), potentially diminishing the fund's asset base and overall long-term value. Conversely, the MFS Government Markets Income Trust (MGF) presented a more balanced breakdown, with 52% from NII. Both funds have adopted managed distribution plans, which may offer immediate yields but warrant caution due to volatility risks.
Investors should also heed the annualized current distribution rates; for instance, MCR stands at 7.93%, while MGF is slightly lower at 7.21%. However, high yield alone should not drive investment decisions, especially since some distributions arise from ROC—the return of investors' own capital. This can create a misleading perception of robust income when, in reality, it represents a potential reduction in the value of underlying assets.
Furthermore, the average annual total returns over five years vary, with MCR at a modest 4.05% and MGF showing a slight decline at -0.60%. Such performance metrics suggest that while yields may look attractive, the underlying capital appreciation might be underwhelming.
In summary, while MFS's closed-end funds may appeal to income-focused investors, careful evaluation of distribution composition, NAV performance, and potential capital erosion is crucial. Investors should weigh these factors against their risk tolerance and investment objectives before committing capital.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
MFS Investment Management ® (MFS ® ) released today the distribution income sources for five of its closed-end funds for May 2025: MFS ® Charter Income Trust (NYSE: MCR), MFS ® Government Markets Income Trust (NYSE: MGF), MFS ® Intermediate High-Income Fund (NYSE: CIF), MFS ® Intermediate Income Trust (NYSE: MIN) and MFS ® Multimarket Income Trust (NYSE: MMT). This information also can be obtained by visiting MFS.com by clicking on Products & Strategies > Closed End Funds > Dividend Source Information.
MFS Charter Income Trust
Distribution period: May 2025
Distribution amount per share: $ 0.04390
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital or other capital source. The fund’s fiscal year begins each December 1 st . All amounts are expressed per common share.
Total cumulative distributions for the fiscal year to date | % Breakdown of the total cumulative distributions for the fiscal year to date | |||
Current distribution | % Breakdown of current distribution | |||
Net Investment Income | $ 0.00000 | 0% | $ 0.13484 | 50% |
Net Realized ST Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Net Realized LT Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Return of Capital or Other Capital Source | 0.04390 | 100% | 0.13484 | 50% |
Total (per common share) | $ 0.04390 | 100% | $ 0.26968 | 100% |
Average annual total return (in relation to NAV) for the five years ended 4-30-2025 | 4.05% |
Annualized current distribution rate expressed as a percentage of month end NAV as of 4-30-2025 | 7.93% |
Cumulative total return (in relation to NAV) for the fiscal year through 4-30-2025 | 0.13% |
Cumulative fiscal year distributions as a percentage of NAV as of 4-30-2025 | 4.06% |
MFS Government Markets Income Trust
Distribution period: May 2025
Distribution amount per share: $ 0.01934
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital or other capital source. The fund’s fiscal year begins each December 1 st . All amounts are expressed per common share.
Total cumulative distributions for the fiscal year to date | % Breakdown of the total cumulative distributions for the fiscal year to date | |||
Current distribution | % Breakdown of current distribution | |||
Net Investment Income | $ 0.01006 | 52% | $ 0.05583 | 48% |
Net Realized ST Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Net Realized LT Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Return of Capital or Other Capital Source | 0.00928 | 48% | 0.06048 | 52% |
Total (per common share) | $ 0.01934 | 100% | $ 0.11631 | 100% |
Average annual total return (in relation to NAV) for the five years ended 4-30-2025 | -0.60% |
Annualized current distribution rate expressed as a percentage of month end NAV as of 4-30-2025 | 7.21% |
Cumulative total return (in relation to NAV) for the fiscal year through 4-30-2025 | 1.88% |
Cumulative fiscal year distributions as a percentage of NAV as of 4-30-2025 | 3.61% |
MFS Intermediate High-Income Fund
Distribution period: May 2025
Distribution amount per share: $ 0.01404
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital or other capital source. The fund’s fiscal year begins each December 1 st . All amounts are expressed per common share.
Total cumulative distributions for the fiscal year to date | % Breakdown of the total cumulative distributions for the fiscal year to date | |||
Current distribution | % Breakdown of current distribution | |||
Net Investment Income | $ 0.00660 | 47% | $ 0.05328 | 61% |
Net Realized ST Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Net Realized LT Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Return of Capital or Other Capital Source | 0.00744 | 53% | 0.03407 | 39% |
Total (per common share) | $ 0.01404 | 100% | $ 0.08735 | 100% |
Average annual total return (in relation to NAV) for the five years ended 4-30-2025 | 5.39% |
Annualized current distribution rate expressed as a percentage of month end NAV as of 4-30-2025 | 9.41% |
Cumulative total return (in relation to NAV) for the fiscal year through 4-30-2025 | -0.18% |
Cumulative fiscal year distributions as a percentage of NAV as of 4-30-2025 | 4.88% |
MFS Intermediate Income Trust
Distribution period: May 2025
Distribution amount per share: $ 0.01957
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital or other capital source. The fund’s fiscal year begins each November 1 st . All amounts are expressed per common share.
Total cumulative distributions for the fiscal year to date | % Breakdown of the total cumulative distributions for the fiscal year to date | |||
Current distribution | % Breakdown of current distribution | |||
Net Investment Income | $ 0.00763 | 39% | $ 0.05248 | 38% |
Net Realized ST Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Net Realized LT Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Return of Capital or Other Capital Source | 0.01194 | 61% | 0.08563 | 62% |
Total (per common share) | $ 0.01957 | 100% | $ 0.13811 | 100% |
Average annual total return (in relation to NAV) for the five years ended 4-30-2025 | 1.73% |
Annualized current distribution rate expressed as a percentage of month end NAV as of 4-30-2025 | 8.45% |
Cumulative total return (in relation to NAV) for the fiscal year through 4-30-2025 | 3.35% |
Cumulative fiscal year distributions as a percentage of NAV as of 4-30-2025 | 4.97% |
MFS Multimarket Income Trust
Distribution period: May 2025
Distribution amount per share: $ 0.03274
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital or other capital source. The fund’s fiscal year begins each November 1 st . All amounts are expressed per common share.
Total cumulative distributions for the fiscal year to date | % Breakdown of the total cumulative distributions for the fiscal year to date | |||
Current distribution | % Breakdown of current distribution | |||
Net Investment Income | $ 0.00000 | 0% | $ 0.10819 | 46% |
Net Realized ST Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Net Realized LT Cap Gains | 0.00000 | 0% | 0.00000 | 0% |
Return of Capital or Other Capital Source | 0.03274 | 100% | 0.12701 | 54% |
Total (per common share) | $ 0.03274 | 100% | $ 0.23520 | 100% |
Average annual total return (in relation to NAV) for the five years ended 4-30-2025 | 5.52% |
Annualized current distribution rate expressed as a percentage of month end NAV as of 4-30-2025 | 7.94% |
Cumulative total return (in relation to NAV) for the fiscal year through 4-30-2025 | 1.71% |
Cumulative fiscal year distributions as a percentage of NAV as of 4-30-2025 | 4.75% |
The above funds have adopted a managed distribution plan. Under a managed distribution plan, to the extent that sufficient investment income is not available monthly, the fund will distribute long-term capital gains and/or return of capital to maintain its managed distribution level. Investors should not draw any conclusions about the fund’s investment performance from the amount of the fund’s distributions or from the terms of the fund’s managed distribution plan.
The Board of the fund may amend the terms of the plan or terminate the plan at any time without prior notice to the fund's shareholders. The amendment or termination of a plan could have an adverse effect on the market price of the fund’s common shares. The plan will be subject to periodic review by the Board. With each distribution that does not consist solely of net investment income, the fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and estimated composition of the distribution and other related information.
The amounts and sources of distributions reported above are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the fund’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The fund will send shareholders a Form 1099-DIV for the calendar year that will tell them how to report these distributions for federal income tax purposes. The fund may at times distribute more than its net investment income and net realized capital gains; therefore, a portion of the distribution may result in a return of capital. A return of capital may occur, for example, when some or all the money that shareholders invested in the fund is paid back to them. A return of capital does not necessarily reflect a fund’s investment performance and should not be confused with ‘yield’ or ‘income’. Any such returns of capital will decrease the fund's total assets and, therefore, could have the effect of increasing the fund's expense ratio. In addition, to make the level of distributions called for under its plan, the fund may have to sell portfolio securities at a less than opportune time.
About MFS Investment Management
In 1924, MFS launched the first US open-end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving financial advisors, intermediaries and institutional clients, MFS still serves a single purpose: to create long-term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk management and long-term discipline. Supported by our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the market. As of April 30, 2025, MFS manages US$600.9 billion in assets on behalf of individual and institutional investors worldwide. Please visit mfs.com for more information.
The Funds are closed-end Funds. Common shares of the Funds are only available for purchase/sale on the NYSE at the current market price. Shares may trade at a discount to NAV.
MFS Investment Management
111 Huntington Ave., Boston, MA 02199
15668.174
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MFS Investment Management:
Shareholders or Advisors (investment product information):
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FAQ**
What factors have contributed to the performance differences in MFS Multimarket Income Trust (MMT) compared to other MFS closed-end funds in terms of average annual total return and cumulative distributions through April 2025?
How does the managed distribution plan for MFS Multimarket Income Trust (MMT) impact the sustainability of its current distribution rate, particularly given its reliance on return of capital sources?
What risks should investors consider regarding the potential amendment or termination of the managed distribution plan for MFS Multimarket Income Trust (MMT), and how might such changes affect market prices?
Given the recent distribution breakdown for MFS Multimarket Income Trust (MMT), how should investors interpret the reliance on return of capital as part of their total distributions for fiscal year 2025?
**MWN-AI FAQ is based on asking OpenAI questions about MFS Multimarket Income Trust (NYSE: MMT).
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