HEAD-TO-HEAD: Aberdeen Standard versus MFS IM

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INVESTMENT APPROACH

The Aberdeen Standard and MFS offerings both invest in European equities, with a focus on mid- and small-cap stocks.

However, there are huge differences in their portfolio characteristics. For example, the Aberdeen Standard fund has a larger allocation towards small- and mid-cap stocks than the MFS offering, according to data from Morningstar Direct.

Source: Morningstar Direct

McDermott also noted that the Aberdeen Standard fund is more concentrated than the MFS fund. The Aberdeen Standard offering only holds 40-70 names, while the MFS fund tends to hold 100-200 stocks.

The top 10 holdings of the Aberdeen Standard Fund already account for nearly 37% of the portfolio, versus the 30% of the MFS fund, he added.

“Considering the [investment universe] the fund invests in, I would say that the MFS fund is not as aggressive or high conviction as some of its peers,” McDermott said.

Top 10 holdings

Source: *Fund factsheet, as of the end of February. **Morningstar Direct, as of the end of January.

The Aberdeen Standard fund makes use of a proprietary screening matrix tool, which looks at four key factors: quality, growth, momentum and value.

“The team looks to lower portfolio risk by targeting high quality companies, which it believes can grow profitably over the long-term,” McDermott said.

Meanwhile, the MFS fund has a focus on high quality companies with durable franchises, according to McDermott.

“To do this, it looks for businesses with clear competitive advantages, such as strong brand or intellectual property, significant free cash flow, solid balance sheets, strong management teams and resilient business models.

“The fund’s team also focuses on companies that do well in any economic scenario,” he added.

Sector and country allocation

Source: Fund factsheets

Source: Fund factsheet

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