Mid-Year Outlook and Long-Term Market Expectations
 

This quarterly report provides an update on our sustainability efforts, in addition to proxy voting and company engagement highlights from the three-month period ended 30 June 2024.

A review of the week’s top global economic and capital markets news.

While we feel it’s important for investors to familiarize themselves with the policy proposals of the major party candidates, historically, electoral outcomes haven’t had major lasting impacts on market performance.

Secular macro trends suggest a regime shift is coming over the next decade. Watch the replay of our recent webinar, for a mid-year outlook and insights on the future of AI, market volatility, and long-term expectations.

Why consider an allocation to both US and non-US companies? We believe that the starting point for market today is vastly different from that of the past decade. And, with rising rates, higher inflation, and shrinking liquidity, investors who seek the best companies across the global markets could help maximize portfolio returns.

Inconsistencies among ESG ratings agencies complicates sustainability analysis for investors. This paper highlights the need for expert analysis and advocates for an active, nuanced approach to ESG integration.

A review of the week’s top global economic and capital markets news.

An examination of market trends and dynamics across the global equity markets.

Leveraging expertise from the MFS Market Insights team to provide timely perspectives on economic and market dynamics that are top of mind for clients.

Summary of the questions and answers from the Mid-Year Long-Term Capital Market Expectations webcast.

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

An executive summary of our Net Zero Progress Report.

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

Rob Almeida suggests that while recent market turmoil may not last, a backdrop of higher costs and lower growth could make for a more challenging operating environment ahead.

This paper discusses how the quantitative equity research team recently researched and implemented an enhancement to the research analyst sentiment score utilized within the MFS Blended Research portfolios. The new natural language processing (NLP) algorithm is materially better at contextualizing text within a document and as a result quantifying its sentiment. By leveraging sophisticated tools such as FinBERT to analyze MFS’ proprietary datasets we believe we can offer a differentiated alpha signal.

A review of the week’s top global economic and capital markets news.

The MFS Digest summarizes key market themes and topics affecting investors and features related thought leadership from across MFS.

Canada regional edition of our Long-Term Captial Market Expectations. These proprietary expectations represent a forward look of risk and return across asset classes and regions in Canadian Dollar terms.

A review of the week’s top global economic and capital markets news.

With yields having corrected much higher over the past couple of years, global fixed income is once again a relevant asset class. In this paper we highlight the attractiveness of European IG Credit.

The July 2024 edition of MFS' Long-Term Capital Market Expectations includes proprietary expectations that look at return and risk across a variety of asset classes and regions. This version details our view of current economic and capital market conditions.

As part of the Global Retirement Survey each year, we seek to better understand member perceptions of TDFs with the goal of trying to gauge where there are misperceptions or gaps that we can address.  Discover how TDFs are evolving and the role they play in retirement planning.

This paper discusses how shifting Japanese monetary policy reflects growing confidence in the economy and how yen appreciation may face structural hurdles. While the weak yen has been a huge benefit for exporters, corporate Japan continues to embrace reforms to improve governance and unlock value from balance sheets, all of which benefits shareholders.

This paper covers the growing interest surrounding global pockets of market concentration. It examines the extreme concentration in the market and explores topics such as the historical view of market concentration and what follows periods of extreme concentration.

This paper discusses our global approach to stock picking within a Growth equity framework, new opportunities and trends in the investment landscape, and the importance of investing through the cycle in companies with durable earnings.

Rob Almeida suggests that investors should be more concerned about fundamentals than potential rate cuts.

A review of the week’s top global economic and capital markets news.

In this edition of The Big Mac, we discuss the role of fixed income in a positively correlated world.

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

This paper discusses our approach to stock picking within a Growth equity framework, new opportunities and trends in the investment landscape, and the importance of investing through the cycle in companies with durable earnings.

Research, regulations, returns and trends in DC

A review of the week’s top global economic and capital markets news.

This summary explains recent developments in the transition to net zero, how investors can constructively engage with companies, stewardship megatrends and questions the industry should be asking companies but aren’t (yet).

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

Annual report offering a comprehensive review of our approach to sustainability, material factor integration, proxy voting and engagement activities at MFS for the 2023 calendar year.

While the valuation landscape for high yield has become more challenging, we believe there are still plenty of attractive opportunities that can be identified through a thorough security selection process.

Those who have, spend. Those who don’t, borrow… then spend.

In this paper we discuss the role of fixed income in target date funds, emphasizing the importance of aligning risk profiles with evolving member objectives throughout the retirement savings journey.

A review of the week’s top global economic and capital markets news.

This summary explores why infrastructure should be on every asset owner's radar, shares insights on long-term investment opportunities and delves into exposure via public versus private markets.

With 100 years of investing experience, MFS has the unique ability to provide insight into the lessons we have learned that can help our clients meet their investment objectives.

A review of the week’s top global economic and capital markets news.

Discover how today's high yields and evolving market conditions create a compelling case for integrating global bonds into your portfolio.

A review of the week’s top global economic and capital markets news.

In the consumer staples space, clear profit visibility has given way to tech-driven disruption. As a result, separating the winners from the losers requires deep research and an appreciation of nuance.

A review of the week’s top global economic and capital markets news.

This MFS Case Study illustrates our collaborative, security-specific approach to proxy voting.

Co-CIO of Fixed Income Pilar Gomez-Bravo, shares her thoughts on three key tail risks and how they could impact the global fixed income markets and our portfolio positioning.

This case study highlights the importance of adopting a system-wide perspective on corporate emissions data accounting and reporting while pursuing workable solutions in the journey to net zero.

Explores the implications that higher interest rates may have for sovereign emerging market debt (EMD) investors.

A review of the week’s top global economic and capital markets news.

We explore how minimum- and low-volatility equities have behaved over the last 20 years, given the relatively strong equity markets, and how those lower-risk stocks have performed during past market drawdowns.

A review of the week’s top global economic and capital markets news.

Explore the results of MFS' 2023 MFS DC Plan Sponsor Survey! This study gathered sponsor perspectives on retirement confidence, managing investment lineups in uncertain markets, retirement income and their views on an array of legislative issues and litigation concerns.

In line with the Task Force on Climate-Related Financial Disclosures (TCFD), this report outlines MFS’ view on climate change and our related actions in both our investment process and business operations.

A review of the week’s top global economic and capital markets news.

Provides commentary on the current geopolitical environment in the Middle East and how the Team is positioning its portfolios.

The market is currently correcting mistaken assumptions that were based on a market cycle driven by artificially low interest rates. As market dynamics shift, the source of a company's growth will also shift.

A review of the week’s top global economic and capital markets news.

While shifting investor allocations from bonds to cash appeared to be the right move during the rate hiking episode, impending rate cuts from the Bank of Canada may indicate it is time to re-allocate back to fixed income.

As the world shifts away from one of artificially suppressed interest rates and cheap manufacturing, investors will need to carefully consider how companies are positioned to navigate the new higher-cost paradigm.

Thought leadership paper around how factor returns behaved in periods of past rate cuts.

A review of the week’s top global economic and capital markets news.

This summary explores the impact of biodiversity on companies and provides practical ways for investors to assess the risks and opportunities from it.

A review of the week’s top global economic and capital markets news.

We provide a high-level overview of recent developments in the weight loss drug category and explore how they may impact other industries. These highly effective drugs were born out of research to treat diabetes but have additional benefits.

A review of the week’s top global economic and capital markets news.

Given economic uncertainty and market volatility, we believe an appropriately sized strategic allocation to a low-volatility equity strategy may allow investors to lessen downside risk and realize long-term competitive returns without having to experience extreme swings.

A review of the week’s top global economic and capital markets news.

In this paper, we address and challenge three common misperceptions that have led to the increased prevalence of passive investments in defined contribution plans.

Which semiconductor companies will be long-term winners from the AI boom? What risks do supply chains and energy usage bring to the sector? This episode of the All Angles podcast features Genevieve Gilroy, sector lead for semiconductors and consumer staples at MFS. Genevieve describes the challenges and opportunities in the semiconductor space and explains why valuations matter when navigating the AI hype cycle.

With deeper representation across the long duration spectrum, lower historical default rates and higher yields relative to comparable quality corporate bonds, taxable municipal bonds can complement and potentially enhance LDI portfolios.

A review of the week’s top global economic and capital markets news.

Sustainable investing is simple in theory but confusing in practice. We reflect on challenges posed by the current approach and how embracing complexity can help investors overcome the challenges.

Outlines why we believe European High Yield is an asset class that deserves to be on investors’ radar given its attractive valuation characteristics, fundamental strength, favorable technicals and long-term performance record.

We examine the performance of low volatility stocks through the lens of market cycles and offer our perspective on the outlook for these stocks, which we believe are well positioned as we move into the next phases of the current cycle.

Intensifying marketplace interest in environmental, social and governance (ESG) investing has brought a new dimension to the way plan members think about retirement funds.  In this paper we discuss the different approaches to incorporating ESG into target date funds, the power of engagement and key takeaways for plan sponsors.

A review of the week’s top global economic and capital markets news.

An examination of why there's an opportunity for value-focused investors in the current environment.

A review of the week’s top global economic and capital markets news.

This case study demonstrates our bottom-up analysis of Schneider Electric and how we identify investment opportunities in a decarbonizing world.

A review of the week’s top global economic and capital markets news.

Rob Almeida examines how indexation has amplified the disconnect between valuations and fundamentals.

A review of the week’s top global economic and capital markets news.

Examines how low-volatility stocks may perform considering the market consensus rate assumptions, which currently anticipate rates cuts, and a declining rate environment for 2024.

A review of the week’s top global economic and capital markets news.

Co-CIO of Fixed Income Pilar Gomez-Bravo, addresses many of the pressing issues facing today’s bond investors including the fight between growth and inflation, building portfolios for an uncertain world and fragility.

Examines how low-volatility stocks may perform considering the market consensus rate assumptions, which currently anticipate rates cuts, and a declining rate environment for 2024.

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

Financial markets appear optimistic to start the year, while investors currently believe inflation will slow, rates fall, and profits rise. Rob Almeida explains why those beliefs may be contradictory.

A review of the week’s top global economic and capital markets news.

Global investment-grade bonds can potentially complement traditional liability-driven investment (LDI) strategies, bringing the potential for attractive risk-adjusted returns while still maintaining critical liability hedging characteristics.

A review of the week’s top global economic and capital markets news.

In this edition of the Big Mac, we discuss how the Fixed Income Fear Of Missing Out (FIFOMO) is going to be the new fear that fixed income investors will soon be facing.

A review of the week’s top global economic and capital markets news.

Forward-looking snapshot of what we believe will be relevant and may influence the markets and economy.

An outline of our voting guidelines and procedures on a wide range of topics, including how we assesses and vote on environmental, social and governance issues.

A review of the week’s top global economic and capital markets news.

A summary of all key themes and topics covered from All Angles Season 2 podcast.

A review of the week’s top global economic and capital markets news.

Investors seeking to capture the benefits of diversification may be well served by an allocation to international large cap value given its sector composition and the low correlation of the asset class to US equity markets.

This Policy prescribes the application of laws adopted by certain countries that are signatories to the United Nations Convention on Cluster Munitions.

A review of the week’s top global economic and capital markets news.

How might investors think about the year ahead? The capital cycle fuels the engine of progress, but it can also create excesses and inefficiencies. Rob examines why that’s relevant today and going forward.

A review of the week’s top global economic and capital markets news.

A review of the week’s top global economic and capital markets news.

Rob Almeida examines how a shift from supply chain efficiency to resiliency will likely affect a company's return on capital. What type of companies are positioned to navigate this paradigm shift, and which companies are not?

A review of the week’s top global economic and capital markets news.

We examine how, during economic downturns, fixed income has offered diversification benefits and reduced the volatility of portfolios that include risk assets such as equities.

Explore the results of MFS' 2023 MFS Global Retirement Survey! In this retirement insight we share the responses from Canadian members on market event impacts, retirement confidence and the power of quality advice.

The MFS Capital Markets View entering the fourth quarter of 2023 aggregates insights on the equity and fixed income asset classes across regions and countries.

Successful investors in emerging market debt must contend with complexity and uncertainty on several levels. We believe our integrated approach, plus our ability to identify and model material risk factors, enables us to better manage risk while focusing on capitalizing on investment opportunities.

The negative stock/bond correlation from 1998 until 2019 was the anomaly, not the positive relationship that began in 2022. While correlations of asset classes normalize, the importance of security selection and manager allocation will matter immensely.

Real yields in the US are either too high or equity valuations are well above fair value. Investors who can understand which enterprises possess real value and those that do not, will find themselves in an enviable position compared with the broader market.

With the federal funds rate at or near peak levels, we believe that cash is likely to start underperforming credit in the period ahead. We favor deploying some credit risk as an attractive alternative to a cash allocation.

Views on an Increasingly Complex World

How can leaders effectively integrate DEI into their organizations? In Episode 6 of the All Angles podcast, MFS’ Chief Diversity Equity & Inclusion Officer Michelle Thompson-Dolberry shares her thoughts on meeting people where they are, building the process rather than checking the box and practical ways to apply DEI in the workplace.

We propose that now might be the time for plan sponsors who have closed or frozen their DB plans to give these plans a fresh look.

From Theory to Practice

How we help our clients achieve their investment goals by employing an investment approach that integrates environmental, social and corporate governance.

Provides insight on MFS's deep history and expertise fixed income as well as its risk managed approach and Global Research Platform.

In this paper we discuss the concept of sequence risk, why it’s most pronounced in the later stages of the retirement journey, why the degree and nature of risk aren’t the same for all target-date fund lineups and how to manage it.