There has always been an argument between proponents of actively and passively managed funds. For those not up to date with the lingo, actively managed funds involve people who pick what they think will be the best stocks for growing a portfolio’s value. Passively managed funds rely on indexes of various markets’ best-performing stocks. As one or more stocks falls away, it is replaced by a new well-performing stock. The thinking is that because the overall market tends to grow, an index like this will provide growth in the longterm. The only problem with this is that sometimes it doesn’t.
The recent financial crisis in China had a lot of us remembering the dark days of the Recession. Index mutual funds plummeted, but some actively managed funds were able to avoid the crisis. This is because they had human beings running the funds, not an abstract index. The human beings were able to observe the various market forces that contributed to the sudden lost in value, and were thus able to steer their clients away. MFS is one such investment management company.
MFS has been able to outperform the index time after time, and they do so through specific means. 1) They have a huge team of experts who look at all of the different ways markets grow and collapse, providing valuable insight to their clients, insight which would be impossible for a single person to cobble together. 2) They provide stringent risk management at every step of the process, never playing fast and loose with your money, and 3) They are focused on your long term growth, because that is essential to how they continue and grow as a company. It’s a winning strategy that helps MFS outperform markets better than the competition, and they can do it for you too.