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HEAD-TO-HEAD: Eastspring vs MFS Meridian
FSA compares two pan-European equity funds: the Eastspring Investments Pan European Fund and the MFS Meridian European Research Fund.
The three-year performance of the MFS Meridian and Eastspring funds versus their benchmark, the MSCI Europe Index. Source: FE Analytics. Fund and index NAVs have been converted to US dollars.
Performance
The Eastspring approach means that the success of its stock picks is especially crucial. Last year, the fund’s performance slipped because an unexpected fall in the price of a holding in a financial stock had a severe impact, Caquineau said.
Yet, given the portfolio’s quality characteristics, the fund should typically hold up better than its peers in falling markets and potentially lag during strong rallies.
“In the short term, the fund might experience difficult times, but longer term it achieves a strong performance while containing risk,” said Caquineau.
By comparison, the MFS Meridian fund’s “focus on high-quality franchises and sustainable earnings growth has helped the fund exhibit greater resilience in weaker market conditions, such as in 2008 and 2011,” said Caquineau.
The fund is unlikely to deviate far from the index because of its consensus approach to stock selection. Moreover, some mandatory constraints, such as a 10% limit on deviation from benchmark weights, means there is inherently less tracking error than the Eastspring fund.
Discrete annual performance
| Fund/Index |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
2013 |
| Eastspring Pan European in US |
3.66 |
-19.47 |
32.74 |
-1.55 |
2.68 |
-8.30 |
20.40 |
| MFS Meridian European Research A1 EUR in US |
2.65 |
-13.79 |
27.41 |
-4.01 |
1.51 |
-5.87 |
25.09 |
| Index : MSCI Europe GTR in US |
3.60 |
-14.32 |
26.24 |
0.22 |
-2.34 |
-5.68 |
25.96 |
Source: FE Analytics
Three-year annualised volatility
| Fund / Index | Volatility |
| Eastspring Investments Pan European in US |
12.57 |
| MFS Meridian European Research A1 EUR in US |
12.29 |
| Index : MSCI Europe GTR in US |
13.11 |
Source: FE Analytics
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