Sun Life MFS Global Growth Fund

Fund commentary | Q1 2024

Opinions and commentary provided by sub-advisor MFS Investment Management Canada Limited.

Market review

Global equity markets rallied near the end of 2023 after the U.S. Federal Reserve (the Fed) signaled that the current trend in disinflation warranted a shift to monetary easing in 2024. As a result, easier financial conditions and strong momentum drove equity markets higher. Mega-cap tech stocks which were already expensive, grew more expensive as investors flocked to the promise of bigger profits. From a valuation perspective, the MSCI ACWI Growth Index is now trading at 29 times earnings or at a 44% premium to the MSCI ACWI Index, considerably above the long-term average.

Performance review

For the three months ended March 31, 2024 (Q1), Sun Life MFS Global Growth Fund Series F (the Fund), returned 8.9%. This compares with returns of 11% for the Fund’s benchmarks, the MSCI All Country World Index CA$ over the same investment period.

  • Stock selection in the industrials and health care sectors contributed to relative performance.
  • Notable individual contributors in Q1 included Apple (underweight), Taiwan Semiconductor (overweight), Tesla (not held), Eaton Corp. (overweight) and Icon Plc (overweight)
    • Taiwan Semiconductor Manufacturing Co
      • The timing of the portfolio’s ownership of the semiconductor manufacturer boosted relative returns. It reported better-than-expected quarterly financial results and forecast strong 2024 earnings per share (EPS) growth as artificial intelligence (AI) adaption gathered further momentum.
    • Tesla Inc.
      • Not owning shares of the electric vehicle manufacturer benefited relative results. Tesla fell following softer-than-anticipated earnings for the sixth straight quarter as it sacrificed pricing and margins in favour of sales.
    • Apple Inc. 
      • The portfolio’s underweight position in the computer and personal electronics maker lifted relative returns. The share price declined as it reported a slowdown in iPhone demand and services in China. Apple’s shares also suffered as the U.S. Department of Justice filed a civil antitrust lawsuit alleging the company monopolized the smartphone market by discouraging innovation and competition. 

  • Stock selection in communication services, consumers discretionary, financials and information technology detracted from relative performance.
  • Notable individual detractors in Q1 included Nvidia (underweight), Naver Corp. (overweight), HDFC Bank (overweight), Meta Platforms (not held) and Nike Inc. (underweight) 
    • Nvidia
      • The portfolio’s underweight position in the computer graphics processor maker detracted from relative results. Its stock rose as it reported impressive revenues thanks to continued demand for its generative AI processors.
    • HDFC Bank
      • An overweight position in HDFC Bank held back relative performance. The stock dropped after it posted mixed quarterly financial results with lower-than-expected deposit growth versus past trends. The results were countered by maintaining net interest margins and a lower liquidity coverage ratio. Management indicated a focus on profitability over growth amidst tight liquidity conditions.
    • Naver Corp
      • The portfolio’s overweight position in the internet search engine and online computer games maker detracted from relative performance. The stock declined as it announced in-line financial results and subdued growth figures in its commerce and ad revenue segments.

Significant transactions


  • Mettler-Toledo International (health care, new position)
  • Daikin Industries (industrials, add)
  • Tencent Holdings (communication services, add)
  • Aon Plc (financials, add)
  • Nike Inc. (consumer discretionary, add)

Sells/Trims – High level, MFS funded the new buys by trimming outperformers Alphabet, Nike, Adidas, Gartner, Sherwin Williams and Adobe Systems. 

  • Adidas (consumer discretionary, eliminated position)
  • Diageo Plc (consumer staples, trim)
  • Eaton Corp. (industrials, trim)
  • Xcel Energy (utilities, trim)
  • Equifax Inc. (industrials, trim)


Fund positioning

The current environment proved challenging for the portfolio’s conservative growth at a reasonable price (GARP) style that seeks above-average durable growth compounders. The Fund’s investment style has historically performed best on a relative basis during difficult market environments but lagged during a strong absolute return environment like the one seen in Q1. The Fund is less exposed to the fairly narrow group of higher valued growth companies that have been leading the market higher (e.g., Nvidia). 


Looking ahead, our sub-advisor MFS Investment Management (“MFS”) believes companies outside of the mega cap tech stocks and AI-related companies can rally. Should this happen, it could benefit the fund’s GARP style of investing.


In Q1, MFS made incremental changes within the sectors. Notably, both industrials and health care portfolio weights increased by 0.4% while consumer staples dropped by 0.4%. Q1 trades generally involved topping up some of the attractively valued stocks with defensive characteristics, such as Nike (consumer discretionary), Daikin (industrials), HDFC Bank (financials), Starbucks (consumer discretionary), Aon (financials), Becton Dickinson (health care) and Pepsi (consumer discretionary). Downside protection alone is not the only reason to own these stocks. These companies also check off other criteria that are important to MFS’ stock selection process, such as above average EPS growth compounding across full cycles and sufficient competitive moat and durability. In addition, the sub-advisor also restarted a position in weighing and measuring instrument company Mettler-Toledo (health care) after exiting it in early 2021.


In a move typical of the MFS’ stock selection process, the sub-advisor funded its purchases by trimming outperformers Equifax (industrials), Accenture (financials), Eaton (industrials) and Boston Scientific (health care) whose multiples had recently expanded. MFS also sold Adidas (consumer discretionary) on concerns over the company’s ability to raise margins.

Fund performance

Compound returns %1 Since inception 10 year 5 year 3 year 1 year Q1
Sun Life MFS Global Growth Fund - Series A







Sun Life MFS Global Growth Fund - Series F


12.3 11.8 8.2 17.8 8.9
MSCI All-Country World Index


10.9 11.2 9.6 23.2 11.0

¹Returns for periods longer than one year are annualized. Data as of March 31, 2024.

Inception date September 30, 2010.

Views expressed are those of MFS Investment Management Canada Limited, sub-advisor to select Sun Life mutual funds for which SLGI Asset Management Inc. acts as portfolio manager. Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. These views are subject to change and are not to be considered as investment advice nor should they be considered a recommendation to buy or sell. This commentary is provided for information purposes only and is not intended to provide specific individual financial, investment, tax or legal advice. Information contained in this commentary has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy.

This commentary may contain forward-looking statements about the economy and markets, their future performance, strategies or prospects or events and are subject to uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Forward-looking statements are not guarantees of future performance and are speculative in nature and cannot be relied upon.

MFS Investment Management Canada Limited is the sub-advisor to the Sun Life MFS Funds; SLGI Asset Management Inc. is the registered portfolio manager. MFS Investment Management Canada Limited has appointed MFS Institutional Advisors, Inc. to provide additional sub-advisory services.

The indicated rates of return are the historical annual compounded total returns including changes in security value and reinvestment of all distributions and do not take into account sales, redemption, distribution or other optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

While Series A and Series F securities have the same reference portfolio, any difference in performance between these series is due primarily to differences in management fees and operating fees. The management fee for Series A securities also includes the trailing commission, while Series F securities does not. Series A securities of the fund are available for purchase to all investors, while Series F securities are only available to investors in an eligible fee-based or wrap program with their registered dealer. Investors in Series F securities may pay a separate fee-based account fee that is negotiated with and payable to their registered dealer.