HEAD-TO-HEAD: MFS versus Robeco

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The MFS Meridian and the Robeco BP funds versus their benchmarks. The MFS Meridian fund’s benchmark is the Russell 1000 Value Index, while the Robeco BP fund’s benchmark is the Russell 1000 Index. In US dollars. Source: FE Fundinfo.

Performance

Wolfstetter expects the MFS Meridian fund to hold up better than the Robeco fund during bear markets, given its focus on higher quality firms.

That said, Wolfstetter noted that the fund’s performance in 2018 was “disappointing” as it lost more than its benchmark.

Annual calendar year performance (%)

Source: FE Fundinfo.

“Most of the strategy’s underperformance came during the first half of 2018. Large positions in Phillip Morris and General Mills, which both shed roughly one-quarter of their market value [during that time], weighed on results,” she said.

Turning to the Robeco fund, Wolfstetter expects the fund to perform better when markets are up, especially given its momentum component.

“The MFS fund may lag the Robeco fund during market rallies.”

The Robeco fund has underperformed its index over a three-year period. Wolfstetter explained that its exposure to the healthcare sector during the first three quarters last year largely hit the fund.

“Positions in healthcare providers and services companies have been the biggest culprits,” she said.

“The managers though, have held fast, if not added, to those positions as they think the companies are poised to do well,” she said, adding that it shows consistency in their investment process.

In terms of volatility, Wolfstetter expects the MFS fund to be less volatile than the Robeco BP fund given its quality tilt.

Three-year annualised volatility

Source: FE Fundinfo

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