HEAD-TO-HEAD: MFS versus Robeco

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Conclusion

The MFS fund receives a four-star Morningstar rating, while the Robeco fund receives three stars. Both funds have an analyst rating of Silver.

Morningstar’s star rating looks at historically-adjusted performance and the analyst rating is based on forward-looking analysis.

Wolfstetter noted that the MFS fund previously had a highest analyst rating of Gold, but Gorham’s expected departure later this year has led Morningstar to downgrade the product to Silver.

“It is a meaningful loss, but the strategy still has several strengths,” she said.

Wolfstetter does not prefer one over the other, as the processes have been consistent and the overall teams of both products have been stable.

“Both will appeal to investors who are valuation conscious,” she said.

That said, she believes that investors who prefer downside protection should consider the MFS fund given its quality bias, while those who are willing to take on more risk and prefer to participate in market rallies should consider the Robeco option.

However, Wolfstetter noted that she is keeping watch on the size of both strategies, which include their Luxembourg Ucits funds, the US-domiciled funds and segregated accounts.

Overall, the MFS strategy has $80bn in assets. “But the firm has limited new institutional accounts, which has helped curb inflows.

“The capacity is also worth-watching for the Robeco fund. The strategy’s $33bn asset base presents a challenge, but the firm has pledged to close it to new investors. It anticipates closing it at around $40bn in assets.”

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