A Closer Look at Positioning and Performance
AUTHOR
Pat Beksha
Sr. Strategist,
Investment Product Specialist
The Blended Research European Equity fund avoids strong style biases and maintains a profile similar to its benchmark.
What are the Portfolio Constraints?
Due to the focus on stock selection and a lack of style bias, we actively constrain portfolio exposures that we do not believe are consistent drivers of returns over time. These constraints have generally included:
PREDICTED
BETA TARGET
~1.0, aligning overall risk with the market.
PREDICTED
TRACKING
ERROR TARGET
~2%
POSITION
LIMITS
No individual stock position exceeds +/-2% versus the benchmark.
SECTOR
WEIGHTS
Kept within +/-2% of the benchmark.
COUNTRY
WEIGHTS
Kept within +/-4% of the benchmark.
If you examine the portfolio’s sector and country weights over the past three years, you’ll notice something striking: they stay very close to the benchmark.
These constraints are not just numbers. They are a disciplined framework that keeps the portfolio focused on what matters: finding the best opportunities through a blend of fundamental and quantitative insights, while seeking to avoid unintended risks.
If you examine the portfolio’s sector and country weights over the past three years, you’ll notice something striking: they stay very close to the benchmark. Any deviations are the result of our stock selection and risk-managed process, not a structural macro view. This means the fund’s performance is driven by the strength of its research inputs, not by taking outsized risks on market direction.
By blending fundamental and quantitative inputs, the strategy seeks to deliver more consistent returns and reduce the ups and downs that can come from relying on just one investment style.
How Has the Fund Performed?
By blending fundamental and quantitative inputs, the strategy seeks to deliver more consistent returns and reduce the ups and downs that can come from relying on just one investment style. As Exhibit 3 shows, the fund’s relative performance has been differentiated from pure fundamental or pure quantitative strategies, often reducing the volatility of the natural cycles of each individual approach.
This approach has led to strong, risk-adjusted returns and competitive rankings among peers, making it a compelling choice for investors seeking balanced exposure to European equities.
How Does It Compare to Competitors?
The MFS Blended Research European Equity portfolio has outperformed the MSCI Europe Index and the peer median over trailing 3-, 5-, and 7-year periods as of March 2026. With a targeted beta of ~1.0, the portfolio has historically captured slightly higher upside than the index, with slightly lower or in-line downside capture. The fund’s disciplined risk management and focus on stock selection have resulted in top-quartile risk-adjusted returns (information ratio) relative to peers. We believe this highlights the effectiveness of the Blended Research approach within European equities over time.
| Performance and Risk: I1 EUR Share | 7Y | 5Y | 3Y | |||
|---|---|---|---|---|---|---|
| FUND | MORNINGSTAR CATEGORY MEDIAN | FUND | MORNINGSTAR CATEGORY MEDIAN | FUND | MORNINGSTAR CATEGORY MEDIAN | |
| Annualized Returns | 10.99 | 7.33 | 11.79 | 7.11 | 14.73 | 8.75 |
| Percentile Rank | 4th | 2nd | 3rd | |||
| Information Ratio | 0.84 | -0.38 | 1.09 | -0.64 | 1.66 | -0.72 |
| Percentile Rank | 3rd | 2nd | 2nd | |||
| Up Capture | 104.68 | 96.54 | 105.50 | 94.49 | 107.90 | 90.67 |
| Percentile Rank | 6th | 3rd | 3rd | |||
| Downside Capture | 95.08 | 102.38 | 91.78 | 105.07 | 84.01 | 100.70 |
| Percentile Rank | 18th | 13th | 13th | |||
| Standard Deviation | 14.69 | 14.76 | 12.55 | 12.80 | 10.26 | 10.75 |
| Percentile Rank | 47th | 41st | 20th | |||
Source: Morningstar. Run on As of 31 March 2026. # of Fund for 7yr: 1322, 5yr: 1573 , 3yr: 1790. Absolute rank for 7, 5, and 3 years: for Return (90, 51, 209); Information Ratio (38, 36, 130); Up Capture ratio (159, 66, 173), Down Capture ratio (291, 291, 400), Standard Deviation (647, 776, 613). Standard Deviation and Down capture ratings based on ascending order.
Conclusion: A Core Solution for Uncertain Times
In a world where market leadership can change and uncertainty is the norm, the Blended Research European Equity Fund offers a disciplined, balanced approach. By combining the strengths of human insight and data-driven analysis, while keeping portfolio risks tightly managed, the fund provides a core portfolio for clients seeking long-term capital appreciation.
Performance results (%) I1EUR shares 12 month rates of total return at NAV as of the period ended:
| Period Ended | Portfolio | Benchmark^ |
|---|---|---|
| 31-Mar-22 | 13.08 | 9.34 |
| 31-Mar-23 | 2.24 | 3.82 |
| 31-Mar-24 | 14.71 | 14.79 |
| 31-Mar-25 | 10.02 | 6.85 |
| 31-Mar-26 | 19.66 | 11.67 |
Performance results (%) I1EUR shares average annual rates of total return at NAV as of 31-Mar-26
| Calendar year returns | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 9.45 | 12.79 | -11.49 | 29.37 | -5.30 | 28.93 | -7.90 | 14.54 | 10.21 | 25.52 |
| Benchmark^ | 2.58 | 10.24 | -10.57 | 26.05 | -3.32 | 25.13 | -9.49 | 15.83 | 8.59 | 19.39 |
The source for all fund data is MFS. Source for benchmark performance: SPAR, FactSet Research Systems Inc.
Start of Class Performance: 22-Aug-11. Fund Inception Date: 22-Aug-11.
Class I shares are only available to certain qualifying institutional investors.
Other share classes are available forwhich performance and expenses will differ.
All financial investments involve an element of risk. The value of investments may rise and fall so you may get back less than originally invested.
For periods ofless than one-year returns are not annualised.
Investors should consider the risks, including lower returns, related to currencymovements between their investing currency and the portfolio's base currency, if different.
Past performance is not a reliable indicator for future results.
Performance results reflect ongoing charges and any applicable expense subsidies and waivers in effect during the periods shown. All historic results assume distributions within the fund and/or the share class are reinvested.
It is expected that the Fund’s deviation fromthe benchmark will be significant.
^MSCI Europe Index (net div) TheMarkets in Financial Instruments Directive (MIFID) is the EU legislation that regulates firmswho provide services to clients linked to financial instruments.
The Fund's investment strategywas changed on 29 June 2016; performance shown prior to this date reflects the Fund's prior investment strategy.
The views expressed are those of MFS, and are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any MFS investment product.
Important risk considerations
The fund may not achieve its objective and/or you could lose money on your investment in the fund. Stock: Stock markets and investments in individual stocks are volatile and can decline significantly in response to or investor perception of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. Geographic: Because the portfolio may invest a substantial amount of its assets in issuers located in a single country or in a limited number of countries, it may be more volatile than a portfolio that is more geographically diversified. Strategy: There is no assurance that the portfolio’s predicted tracking error will equal its target predicted tracking error at any point in time or consistently for any period of time, or that the portfolio’s predicted tracking error and actual tracking error will be similar. The portfolio’s strategy to target a predicted tracking error of approximately 2% compared to the Index and to blend fundamental and quantitative research may not produce the intended results. In addition, MFS fundamental research is not available for all issuers. Quantitative Strategy: MFS’ investment analysis, development and use of quantitative models, and selection of investments may not produce the intended results and/or can lead to an investment focus that results in underperforming portfolios with similar investment strategies and/or the markets in which the portfolio invests. The proprietary and third party quantitative models used by MFS may not produce the intended results for a variety of reasons, including the factors used, the weight placed on each factor, changing sources of market return, changes from the market factors’ historical trends, and technical issues in the development, application, and maintenance of the models (e.g., incomplete or inaccurate data, programming/software issues, coding errors and technology failures). Please see the prospectus for further information on these and other risk considerations.
Please note this is an Actively Managed Product.
For more information about MFS Meridian® Funds – Blended Research European Equity Fund, please visit www.mfs.com or contact your MFS representative.
See the fund’s offering documents for more details, including information on fund risks and expenses. For additional information, call Latin America: 416.506.8418 in Toronto or 352.46.40.10.600 in Luxembourg. U.K.: MFS International (U.K.) Ltd., 1 Carter Lane, London, EC4V 5ER UK. Tel: 44 (0)20 7429 7200. European Union: MFS Investment Management Company (Lux) S.a r.l. 4 Rue Albert Borschette, Luxembourg L-1246. Tel: 352 2826 12800 .
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