Maintaining highline performance in its mutual funds is a key strategy for
"Fund performance improvement has always been a leading indicator of future fund flows, so [our improvement in this area] helps give us confidence that MFS will be able to regain market share in the domestic retail mutual fund market in the U.S.," Prieur said. "MFS has significantly improved its short- and medium-term fund performance in 2004 with 82% of funds over one year and 77% over three years in the top half of the
Prieur said that Rob Manning, who took the post of CEO over a year ago, "made investment performance his top priority." Improvements in performance have had an immediate effect of boosting flows in the institutional marketplace. Net flows went positive in the fourth quarter of 2004 with $100 million net inflows, climbing to $700 million net inflows in the first quarter of 2005.
One problem with MFS's former strategy for fund distribution is that it was inadequately diversified, Prieur said.
"If you look at the sales profile we had five years ago, it is clear that MFS was overweight in
In 2000, 84% of fund investments were in U.S. equities, whereas only 31% of assets under management were allocated in U.S. equities in the first quarter of 2005. International equity has been an enormous boost, from 4% of assets in 2000 to 39% of assets in the first quarter of 2005. Balanced funds rose from 2% of assets to 18% during the same period.