Sun Life MFS Global Value Fund

Fund commentary | Q4 2023

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

Market Review

What a stunning finish to the year across most major asset classes! An effervescent two-month rally drove global equity markets up sharply in the fourth quarter (Q4), with the MSCI World Index rising 8.66%, resulting in a total return of 20.5% for the calendar year. The rally was driven by a dramatic shift in interest rate expectations after a flurry of data showing inflation falling quickly in most Western economies and a pivot in language from the U.S. Federal Reserve (the Fed). Our sub-advisor MFS Investment Management (MFS) believes that investors started betting that major central banks were finished raising interest rates and will cut rates several times next year. Traders are now pricing in five or six rate cuts by both the Fed and the European Central Bank in 2024, a stark turnaround from the fears of higher-for-longer borrowing costs that triggered a market setback in the autumn.


Performance Review

For the three months ending December 31, 2023, the Sun Life MFS Global Value Fund F (the “Fund") provided a return of 7.4%. This compares with returns of 8.7% for the Fund's benchmarks, the MSCI World Index C$ over the same investment period.

  • Stock selection in industrials, utilities and consumer staples contributed to performance
  • Currency
  • Notable individual contributors included UBS AG, Charles Schwab, Intel Corp. and Exxon Mobil (not held)
    • UBS AG - An overweight position in the investment management and banking firm helped relative returns. The stock price advanced as it reported above-consensus earnings results, primarily due to lower-than-expected funding costs and operating expenses. 
    • Charles Schwab - The portfolio's overweight position in the financial services provider benefited relative performance. The stock price advanced as it reported a relatively in-line and better-than-feared quarter. 
    • Intel Corp. - The portfolio's overweight position in the semiconductor company helped relative returns. The stock price rose as it released earnings-per-share and guidance above estimates due to strong commercial and consumer demand for PC components.

Detracting from performance were:

  • Stock selection in health care
  • An underweight positioning in information technology
  • Stock selection in consumer discretionary
  • Notable individual detractors included Aon Plc, Comcast Corp., Bayer and Conocophillips
    • Aon Plc - An overweight position in the risk management and human capital consulting services provider Aon detracted from relative performance. Despite announcing solid quarterly revenue and earnings growth that reflected a favourable industry backdrop, the share price declined on results that continued to lag behind its peers.
    • Comcast Corp. - The portfolio's overweight position in the cable services provider Comcast detracted from relative returns. Although it delivered solid revenue results for the quarter, the share price depreciated as management reported higher-than-anticipated cable subscriber losses.
    • Bayer - An overweight position in the crop science and pharmaceuticals company weighed on relative performance. The share price fell as it reported below-consensus sales within its pharmaceuticals and consumer health divisions.

The strategy underperformed the MSCI World index over the full year, 12.44% vs 20.47% respectively. This was mostly due to holdings not owned, the strong share price gains and extreme correlation among the megacap, technology-related stocks. The Fund owns shares of Alphabet and Microsoft but not of the other five “Magnificent Seven” megacap stocks, due to concerns about the durability of the businesses or the high expectations baked into high valuation


Significant Transactions


  • British American Tobacco – The Fund bought a new position in British American Tobacco, the UK-listed tobacco company, taking advantage of share price weakness after management lowered 2023 profits guidance. 
  • Pfizer Inc.
  • TotalEnergies SE – The Fund bought a new position in TotalEnergies, the French oil and gas producer. MFS likes the valuation discount of the European integrated players relative to their U.S. peers. 
  • Northern Trust – Added to existing position.
  • Mitsubishi Electric – The Fund bought a new position in Mitsubishi Electric, the Japanese conglomerate. Its several good businesses drive most of its profits, notably in factory automation, air conditioning and elevators. 


  • Eaton Corp.
  • Ingersoll Rand
  • Aon Plc
  • Alphabet Inc.
  • Danone SA

Fund Positioning

Against the MSCI World index, the portfolio is overweight financials, industrials and energy, where MFS continues to find the most compelling value opportunities. 

The biggest sector underweights are in information technology and consumer discretionary, given the dominance of growth stocks and the weighting impact of megacaps in the index. Over the course of the year, MFS has moved the portfolio to overweight in both energy and utilities, reflecting better value opportunities.

As of December 31, 2023, from an aggregate level, there were no major changes among the sectors. The largest increase took place within consumer staples where the overweight relative to the benchmark extended from the previous quarter from 90 bps to 160 bps, primarily through the purchase of British American Tobacco. 

At the stock level, MFS added to existing positions in Pfizer, Northern Trust, Truist Financial, Johnson Controls, Aptiv, Diageo, Dun & Bradstreet, BNP Paribas, NatWest, Omnicom, LKQ, Becton Dickinson, Pernod Ricard and Suncor. At the same time, MFS trimmed positions in Eaton, Ingersoll Rand, Alphabet, Aon, Danone, Pioneer Natural Resources, JP Morgan Chase, UBS, CBOE, Mitsubishi Financial, Wolters Kluwer, Travelers, Petrobras, Intel and Boston Scientific to manage position size, sell into relative strength and reflect their higher valuations relative to some of the purchases.

Overall, the companies owned within the Fund have sustainable competitive advantages and strong pricing power. The portfolio is defensively positioned and less exposed to high-beta and long-duration assets, which look overpriced. The increased appetite for risk during the last two months of the quarter caused higher-beta stocks to outperform. The global value strategy is less risky and has a lower beta than the overall market. The historical data compellingly show that lower-beta companies outperform higher-beta ones over the long term. At the moment, MFS does not believe there has been any fundamental shift that would change this long-term trend.

Fund performance

Compound Returns %¹ Since Inception 10 Year 5 Year 3 Year 1 Year Q4

Sun Life MFS Global Value Fund - Series A


8.5 9.1 7.0 11.1 7.1

Sun Life MFS Global Value Fund - Series F


9.7 10.4 8.3 12.4 7.4


11.0 12.0 8.5 20.5 8.7

¹Returns for periods longer than one year are annualized. Data as of December 31, 2023.

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.