HEAD-TO-HEAD: Fidelity versus MFS

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Manager review

“Both funds emanate from high quality firms, with strong lead managers helped by large supporting casts,” said Möttölä.

Fidelity’s fund is steered by a single team led by Eugene Philalithis, who has been at the company since 2007. Chris Forgan is the most recent addition to the three-member bench of managers, joining from Janus Henderson in 2018.

The broader multi-asset team includes 18 members altogether. It is primarily responsible for overseeing the underlying strategies, but also manages the fund’s top-down allocation. A large part of active performance is achieved at the sub-strategy level, with most of the underlying strategies being run in-house.

The fund managers are supported by strong resources and experienced teams at Fidelity for macro research and strategy selection, according to Möttölä.

“There’s been some turnover in the lower ranks, but recently this seems to have slowed down. Our overall opinion of the team is positive,” he said.

The MFS fund is managed in three sleeves and has seen some changes in personnel recently.

“However, MFS’s depth of talent mitigates concern over high levels of manager turnover at this strategy’s underlying portfolios,” said Möttölä.

The latest exit is highly regarded manager Nevin Chitkara who will leave the fund at the end of this year to focus on the equity-only MFS Meridian US Value strategy.

“Steve Gorham, who has been with the fund since 2000 and relative newcomer Vipin Narula remain on the sleeve, while six-year veteran Jonathan Sage continues to run a quantitative sleeve that takes the other half of the equity portfolio,” said Möttölä.

“Gorham is key to our positive conviction in the team,” he added.

In the fixed-income sleeve there have also been some changes.

Richard Hawkins, a manager since 2010, retired in June 2018. Veteran Erik Weisman and a quartet of shorter-tenured managers remain, including Andy Li, who was hired in late 2018.

“Overall, in terms of management quality, Fidelity has a slight edge,” concluded Möttölä.

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