HEAD-TO-HEAD: MFS versus Morgan Stanley

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Introduction

Wall Street’s record-breaking 11-year bull market came to an end in mid-March amid fears about the economic impact of the spreading Covid-19 pandemic.

However, the subsequent bear market was one of the most short-lived ever, and the S&P 500 hit a record high on 18 August.

Stock prices have remained above pre-crisis levels, with technology shares in the vanguard as they had been throughout the previous decade.

But now investors face several short-term risks that could derail the current recovery in both the economy and asset prices. These risks include the US presidential election next month, with the shocking prospect that incumbent US president Trump might resist a peaceful transition of power should he lose.

US markets have been buoyed by fiscal and monetary packages, and investors had expected a successful negotiation about a fourth fiscal stimulus package between Democrats and Republicans in Congress. Instead, there is a stalemate.

Equity prices, even the seemingly unstoppable technology growth sector, are likely to experience volatility during the coming months.

In this unstable environment, FSA asked Darius McDermott, managing director, Chelsea Financial Services to compare two products which have the environment as their core themes: the MFS Meridian US Concentrated Growth Fund and the Morgan Stanley US Advantage Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 8 October 2020)

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