Last updated: 20:03 / Friday, 29 September 2017
Annual Event in Boston

MFS Investment Management: “We’re Going Through an Unprecedented Period, Markets Are Becoming More Efficient, but Much More Complex”

  • MFS Investment Management brought together over 145 professionals for its 2017 MFS Annual Global Analyst and Portfolio Manager Forum
  • The investment management company invited Alexander Kazan, Director for Global Strategy at the Eurasia Group, to analyze the economic and political dynamics of the global landscape
  • James Swanson, Chief Investment Strategist, conveyed his concern about the disconnect between market sentiment and key economic data

The 2017 MFS Annual Global Analyst and Portfolio Manager Forum was held from the 15th to the 17th of May in Boston, where the international asset management company, MFS Investment Management, is headquartered. The event was attended by professionals from the wealth management industry and fund analysts from the Offshore and Latin American markets, to meet with the firm’s investment teams and product specialists.

Lina Medeiros, President of MFS International Ltd., was responsible for welcoming over 145 attendees, mostly from Argentina, Chile, Uruguay Brazil and US, who participated in the event. During her speech, she pointed out the company’s pioneering nature in the asset management industry, a track record spanning over 90 years, and that the company remains committed to offering portfolios with strong risk-adjusted returns, low turnover, and high active share.

Medeiros then stressed the long-term nature of MFS' strategies and the firm’s values: teamwork, constant evolution in the search for long-term solutions for clients, and an absolute commitment to its fiduciary responsibility. She spoke of the firm’s ethos, which is “always doing the right thing for the client” with the greatest dedication possible, and reminded the attendees that the MFS team loves what it does: “We believe that what we do is to help people. Having clients who trust us to manage their wealth is a huge responsibility, and that generates a deep satisfaction that inspires us to remain firm in our convictions.”
It is due to this work ethic, in part, that more than 90% of the firm’s investment vehicles, the MFS Meridian Funds, are in the first half of their respective Morningstar categories over 5 and 10 years as of 31 March 2017. In addition, approximately 70% of the funds rank in the first quartile against their Morningstar peers over 10 years.

A Diversified Business

MFS has more than US$ 450 billion in assets under management. Medeiros presented this figure and defended a solid business model, with capacity to continue leading investment partner of choice in the future due to the firm’s diversified approach across three different dimensions: by channel, by style and by region. MFS institutional business represents about 68% of client assets, with the remaining 32% in retail client accounts. In addition, at the product level, the company offers broad classification by asset class, with its thorough knowledge in different equity disciplines as well as its renewed focus to broaden and deepen its capabilities in fixed income. Finally, at the geographical level, 77% of the business comes from the Americas region, a fact that should not be surprising given the US origin of the firm, strong US-Canada commercial ties, and more than 25 years of presence in Latin America. However, MFS is also devoting considerable resources to grow inEurope and Asia, which they hope will be noticeable in the coming years.

Which Issues are Investors Losing Sleep Over?

Prior to the conferences which followed, Ms. Medeiros presented the results of a study carried out by MFS at the end of last year. In this survey, more than 800 financial advisors and 450 professional buyers were asked which were their main concerns over the next 12 months. For these investors, geopolitical tensions and instability are as relevant as market-driven issues. Another one of the conclusions emerging from this study is that, as far as investment factors are concerned, for clients, the return on a product is just as important as how that return is achieved, showing that the qualitative aspects of the investment process are noteworthy.

Medeiros concluded her remarks by pointing out, that even for long-tenured investment industry professionals, this is an unprecedented period. She stressed that investors should become accustomed to lower-than-expected returns, given the US interest rate environment: “Financial markets, despite being more efficient, are becoming increasingly complex.”

An Overview of the Event’s Agenda

Taking a closer look at MFS Investment Management’s capabilities, Michael Roberge, CEO, President and CIO, reviewed the key differentiating elements of its approach: the search for opportunities through active management, a long-term investment horizon, and risk management .
Later, during the talk entitled “Disruptions, dichotomies, and destinations,” Erik Weisman, the firm’s chief economist, gave his views on the disruptive nature of technology and innovations derived from “Big Data”, as well as the effects they may have on the global economy and on the investment environment.

Following this line of discussion, four equity analysts from the technology and capital goods teams presented the implications of the changes that are occurring in the automotive industry: the vehicle of the future will be autonomous, electric, shared, and connected to a network.

The event also looked at the impact of recent regulatory changes in the financial services industry. Martin Wolin, Chief Compliance Officer, together with a panel of professionals, reviewed the main regulatory developments in the United States and Europe, focusing on the OECD CRS regulations, the MiFID II directive and money laundering prevention policies.

To analyze the global geopolitical situation in detail, MFS invited Alexander Kazan, Managing Director of Global Strategy for the Eurasia Group, who reviewed the economic and political dynamics of the global scene, including China, Russia and the Middle East.

With a focus on the US and other developed markets, James Swanson, Chief Investment Strategist, conveyed his concern about the disconnect between market sentiment and key economic data. Meanwhile, Bill Adams, CIO of the Global Fixed-Income Department, detailed the management company’s ability to find value in credit markets worldwide.

These presentations were accompanied by a series of breakout sessions on the range of MFS products, with the participation of its European, US, and Global equity management teams, as well as the teams from the global fixed income department, including emerging markets, and investment grade corporate debt.

Closing the conference, José Corena, Managing Director for the Americas, reviewed the main topics discussed during the event and thanked the attendees for their presence.