MFS Municipal High Income Fund
MFS Series Trust III · 5 share classes
Fund classification
Classified from what the fund holds · as of 2026 Q2
MFS Municipal High Income Fund is an actively managed U.S. bond fund.
- Asset class
- Bonds
- Region
- United States
- Management
- Actively managed
- Fund type
- Open-end fund
- Credit quality
- High yield
- Rate sensitivity
- Intermediate duration
Fund profile
As filed in the prospectus · 2026 Q2
The funds investment objective is to seek total return with an emphasis on high income exempt from U.S. federal income tax, but also considering capital appreciation.
The fund invests primarily in municipal bonds selected through bottom-up fundamental analysis of individual issuers, with at least 80% of assets in federal tax-exempt securities. The fund may concentrate 25% or more of assets in similar project types such as education, healthcare, or utilities, and may invest significantly in a single state or small number of states. Because the fund may allocate up to 100% of assets to below-investment-grade municipal debt and concentrate holdings by geography and project type, performance depends heavily on the credit quality and performance of those concentrated positions.
| Share class | Gross | Net |
|---|---|---|
| MMHYX | 0.73% | 0.66% |
| MMHBX | 1.73% | 1.41% |
| MMHCX | 1.73% | 1.66% |
| MMIIX | 0.73% | 0.66% |
| MMHKX | 0.65% | 0.57% |
Net is what a holder pays after the adviser's contractual waiver; gross is before it. A waiver can expire.
Portfolio turnover 9.00% · as of 2026 Q2
Allocation
Asset groups · long / short shown separately, never netted · 2026 Q2
| Bonds | 95.54% |
| Cash & short-term | 2.37% |
| Securitized | 0.79% |
Latest quarter
What changed since the fund's previous filing
Largest new: Black Belt Energy Gas District, County of Mobile AL, California Community Choice Financing Authority, New Hampshire Business Finance Authority ×2, King County Public Hospital District No. 2, Sunbridge Stewardship District, Oak Hills Local School District
Largest exited: Puerto Rico Electric Power Authority, Toll Road Investors Partnership II LP, Kentucky Municipal Energy Agency, South Carolina Public Service Authority ×2, City of Burbank IL ×2, New Hope Cultural Education Facilities Finance Corp.
Return profile
Total return as filed — price change plus distributions reinvested · trailing figures to Apr 2026
| Share class | 1-year | 3-year | 5-year | Vol | Worst fall |
|---|---|---|---|---|---|
| +6.52% | +16.44% | +5.75% | 4.75% | -6.67% | |
| +5.73% | +13.89% | +1.90% | 4.61% | -6.85% | |
| +5.45% | +12.98% | +0.55% | 4.72% | -6.97% | |
| +6.51% | +16.37% | +5.77% | 4.63% | -6.67% | |
| +6.72% | +16.67% | +6.24% | 4.83% | -6.79% |
These classes hold the same portfolio, so the 5.69pp spread over 5 years is the cost difference between them — roughly 1.14pp a year — not a difference in what they own.
Debt profile
What this fund holds — value-weighted across its bond and securitized long positions · as of 2026-04-30
Share of the fund's debt by how its coupon behaves — the fact that decides whether a rate move reaches this portfolio at all.
| Fixed rate | 87.5% |
| Floating rate | 9.0% |
| Zero-coupon or unclassified | 3.5% |
Share of the fund's debt value in each maturity band, shortest first.
| <1y | 0.5% |
| 1-3y | 1.6% |
| 3-5y | 1.9% |
| 5-10y | 7.8% |
| 10y+ | 88.2% |
These three overlap — one holding can be in arrears and paying in kind at once — so they are shown separately and never summed.
Risk profile
Interest-rate and credit-spread sensitivity, both in years · as of 2026Q2
More of this fund’s sensitivity sits in credit spreads than in interest rates — a rate rally that comes with a credit selloff works against it.
Where the loss would come from. The two shocks are the same size, so this is the balance of the fund's two sensitivities rather than a bet on one moving more.
| Credit spreads | 52% |
| Interest rates | 48% |
Filers report the impact of a 0.01% move only, so the total is our own scaling of that one number and overstates the loss on most bonds — read it as approximate, never as precise. The two sensitivities overlap rather than add up: they measure the same positions against different shocks, which is why the durations above are shown side by side and never summed.
Share of the fund's spread duration carried by each credit tier.
| High yield | +3.87 yr |
| Investment grade | +3.14 yr |
Share of duration at each point, shortest first. A positive figure loses value when spreads widen; a negative one offsets — a credit hedge.
| 3 mo | 0.02 yr | 0% |
| 1 yr | 0.31 yr | 5% |
| 5 yr | 1.32 yr | 20% |
| 10 yr | 3.11 yr | 48% |
| 30 yr | 1.76 yr | 27% |
| 3 mo | 0.02 yr | 0% |
| 1 yr | 0.37 yr | 5% |
| 5 yr | 1.41 yr | 20% |
| 10 yr | 3.33 yr | 47% |
| 30 yr | 1.89 yr | 27% |
The two bands measure the same positions against different shocks and do not add — a Treasury carries rate duration and no spread duration, a floating-rate credit the reverse. Rate tenors are also summed across every currency the fund discloses.
Show the numbers
| Tenor | Rate yrs | IG yrs | HY yrs | IG $/bp | HY $/bp |
|---|---|---|---|---|---|
| 3 mo | +0.02 | +0.01 | +0.02 | $3.4k | $8.2k |
| 1 yr | +0.31 | +0.12 | +0.25 | $64.9k | $133.4k |
| 5 yr | +1.32 | +0.61 | +0.79 | $331.4k | $428.6k |
| 10 yr | +3.11 | +1.49 | +1.83 | $807.9k | $989.3k |
| 30 yr | +1.76 | +0.91 | +0.98 | $491.9k | $532.3k |
Dollar change per 1bp of spread movement, as filed and sign-anchored. A blank cell was not filed; a zero was.
Holdings
By % of NAV · equity positions carry filed share counts · every resolvable issuer links to its company page
| Ticker | Issuer | %NAV | Value | Shares |
|---|---|---|---|---|
| — | MFS Institutional Money Market Portfolio | 2.37% | $128.18M | — |
| — | Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue5.00% · due 2058-07-01 | 1.85% | $99.98M | — |
| — | Berks County Municipal Authority (The)5.00% · due 2039-06-30 | 0.59% | $31.78M | — |
| — | Buckeye Tobacco Settlement Financing Authority5.00% · due 2055-06-01 | 0.58% | $31.12M | — |
| — | California Community Choice Financing Authority5.25% floating · due 2054-01-01 | 0.50% | $26.99M | — |
| — | New York Transportation Development Corp.5.13% · due 2060-06-30 | 0.46% | $24.72M | — |
| — | New Hampshire Business Finance Authority5.88% · due 2038-12-15 | 0.45% | $24.29M | — |
| — | City of Chicago IL5.00% · due 2033-01-01 | 0.45% | $24.08M | — |
| — | New York Transportation Development Corp.5.25% · due 2060-06-30 | 0.44% | $23.61M | — |
| — | Iowa Tobacco Settlement Authority0.00% · due 2065-06-01 | 0.42% | $22.79M | — |
Top 10 positions are 8.10% of net assets, top 25 12.99%, across 489 issuers.
See more of this fund's book
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