MFS Meridian Global Equity A1 USD

Analyst Report
Morningstar's Take

by Natalia Wolfstetter

Our admiration for MFS Meridian Global Equity stems from the redoubtable, high-quality decision-makers implementing a sensible, measured approach. This stable operation sees comanagers Roger Morley and Ryan McAllister construct a portfolio in line with their exacting quality and growth standards, utilising the shop’s extensive global analyst pool. Both are long-standing employees; Morley has been established as a fine investor here for many years. McAllister’s transition to comanager in 2016 has been as smooth as could be hoped; he’s steadily broadened his knowledge across industries and worked cohesively with Morley and the broader analyst group, the latter providing a sturdy base for identifying potential investment ideas. Importantly, the portfolio has retained the key ingredients that have rewarded investors for well over two decades, methodically seeking reasonably priced companies with enduring competitive advantages.We’ve long been fans of this approach; it is straightforward and disciplined and willing to ignore index weights, as seen in its long-standing skew to industrials and healthcare companies at the expense of commodities and tech. This, combined with the long-term mindset, can see performance veer well away from the market. Unfortunately, this has been on the negative end latterly, while more borderline prospects have also hindered medium-term results particularly compared with MFS’ more-concentrated sibling. Without excusing this subpar run, prudent portfolio construction has meant that problem stocks have usually been smaller exposures, while this strategy has never sought the fastest-growing firms that have been among the key missed opportunities. It’s worth remembering that styles can shift from favour, and the team has continued to identify plenty of longer-term winners in other industries. Capacity management is another hallmark here; the shop consistently puts client interests first. In short, we remain as optimistic as ever that the strategy can outperform the market over a full cycle.

Morningstar Analyst Rating™
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Portfolio RoleCore.
Morningstar Pillars
Distinguished portfolio management pair.
ParentAbove Average
MFS walks the walk on long-term investing.
Morningstar Analyst RatingMorningstar evaluates funds based on five key pillars, which it's analysts believe lead to funds that are most likely to outperform over the long term on a risk-adjusted basis.
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