Sun Life MFS Global Value Fund

Fund commentary | Q2 2023

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

Market Review

The developed markets, represented by the MSCI World Index, rose in the second quarter (Q2) returning 4.5%. Seven mega-cap stocks accounted for over half the market’s return so far this year, driven by artificial intelligence (AI) euphoria.

It is interesting to note that only two stocks of this “magnificent seven” companies responsible for half the returns have seen earnings upgrades (Nvidia and Meta) while the other five (Tesla, Amazon, Microsoft, Apple, Alphabet) have seen flat earnings revisions or downgrades.

Performance Review

The Sun Life MFS Global Value Fund Series F underperformed its benchmark, the MSCI World Index, in Q2. The significant rally in growth stocks and the extreme correlation amongst the technology related mega caps were significant headwinds.

The underperformance was due to sector allocation and stock selection, notably the underweight in information technology and consumer discretionary sectors that included Tesla and

  • Why the Fund did not own Nvidia
    • The stock has hit USD$1 trillion valuation on a business that generated just USD$27 billion of sales revenue last year. This is a multiple of over 35x sales, and not profits. Even on bullish forecasts of USD$43 billion sales, the multiple is incredibly high.

  • Eaton Corporation Plc - The company reported operating revenue in the Americas region above estimates.
  • Vulcan Materials Co - The stock price climbed as the company's earnings per share results came in above expectations with aggregate pricing coming in much better than anticipated and volumes holding up better than feared.
  • Petroleo Brasileiro - The stock benefited from solid operational results, despite softer oil prices, a robust dividend payout and a better-than-expected outlook.

  • Nvidia - Not owning shares of computer graphics processor maker NVIDIA (United States) detracted from relative returns.
  • Apple Inc. - The stock price advanced as the company reported better-than-anticipated financial results and strong iPhone sales, especially in emerging markets such as India.
  • - The company reported broad improvements across all aspects of the business, resulting in higher-than-expected revenue and raised guidance. Amazon Web Services led the charge following continued price optimization efforts.

Significant Transactions


  • General Dynamics (industrials) – Our sub-advisor MFS Investment Management (MFS) initiated a new position in General Dynamics, the global aerospace and defense company. The balance sheet is strong with potential for higher capital return via dividends and buybacks.
  • CME (financials) – MFS started a new position in CME. MFS likes the strong competitive position, with a futures business that delivers high margins.
  • Dun & Bradstreet (financials) – MFS started a new position in Dun & Bradstreet. The team likes the high market share, recurring revenue stream and stickiness of the core data business.
  • Nitto Denko (materials) – MFS started a new position in Nitto Denko. While smart phones and industry tapes businesses have been challenged, MFS sees potential for recovery and long-term growth.
  • Analog Devices (information technology) –MFS likes the high exposure to industrials (50% of sales) and auto industries (20% of sales) which should drive higher semiconductor content over time.
  • Kenvue (consumer staples) – MFS participated in the IPO of Kenvue, the consumer health business being spun out of Johnson & Johnson. MFS likes the strong market share position in consumer health categories growing 3% to 4% annually and strong free cash-flow generation and generous capital return.


  • MFS also added to several existing positions where valuations are attractive, such as Charles Schwab, Cap Gemini, Diageo, National Grid, Chubb, Bank of America, Northern Trust, Bayer, NXP Semiconductors, Eaton, Icon, Pioneer, Union Pacific, Pfizer, Duke Energy, Suncor, NatWest and Secom.


  • The Fund sold out of positions in Nasdaq, Merck, Northrop Grumman, Yum China and Texas Instruments to fund new investments in more compelling value opportunities.
  • The Fund trimmed positions in the following stocks to fund buys on more favorable valuations: Boston Scientific, Nestle, Amadeus, Vulcan Materials, Richemont, PPG, CGI, Alphabet, Pernod Ricard, CBOE, Travelers, Wolters Kluwer and Ingersoll Rand.

Fund Positioning

  • The portfolio reflects the changing opportunity set in the market as new relative value opportunities emerge.
  • The portfolio is overweight financials and industrials. Holdings in the financial sector are well capitalized, have diversified exposures and continue to be well positioned over the long term. The biggest sector underweights are in information technology and consumer discretionary, given the dominance of growth stocks and the mega-weighting impact. MFS has continued to reduce the position in health care. The biggest sector underweights are in real estate and health care.
  • The Fund’s average holding period is six to seven years. MFS continues to find opportunities across industries and geographies in good businesses with shares trading at attractive valuations. With regards to rising interest rates, the portfolio is overweight financials, which should benefit if economic growth holds up. MFS believes the portfolio will perform well if earnings do fall.
  • Corporate profit margins and earnings look too high, with companies, consumers, governments and central bankers yet to fully adjust to a world of higher inflation and higher interest rates. Consequently, the Fund’s portfolio positioning remains cautious. 

Fund performance

Compound Returns %¹ Since Inception2 10 Year 5 Year 3 Year 1 Year Q2

Sun Life MFS Global Value Fund - Series A


9.3 6.9 9.2 17.9 2.4

Sun Life MFS Global Value Fund - Series F


10.6 8.1 10.5 19.3 2.7


12.0 9.2 11.1 21.6 4.5

¹Returns for periods longer than one year are annualized. Data as of June 30, 2023.

²Partial calendar year. Returns are for the period from the fund’s inception date of October 1, 2020 to December 31, 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.