MutualFundWire.com: An Insurer's Mutual Fund AUM Rises 4.5 Percent

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Tuesday, November 12, 2019

An Insurer's Mutual Fund AUM Rises 4.5 Percent

An insurer's asset manager's fixed income AUM grew by 11 percent for the 12 months that ended on September 30.

Michael W. Roberge
MFS Investment Management
CEO

Dean Connor, president and chief executive officer, and director of Sun Life Financial (parent of MFS), states on the Toronto-based insurer's Q3 2019 earnings call (as transcribed by Seeking Alpha) that, "MFS assets under management increased over the quarter to USD 495 billion, reflecting net inflows and strong investment results. 92%, 93% and 94% of MFS' U.S. retail fund assets were in the top half of their Lipper categories based on 10-, 5- and 3-year performance, respectively. We've also continued to build out our fixed income capabilities, as Mike Roberge described at Investor Day. Over the past year, fixed income AUM has grown 11%, driven by a 55% increase in institutional fixed income sales and a 35% increase in retail fixed income sales, both on a year-to-date basis."

Mike Roberge, CEO of MFS Investment Management, notes that "I think, clearly, we continue to see the trend out of active products and equities into passive products at a rate that's lower than what we saw several years back. And it looks like what's happening in the marketplace is the market's bifurcating on the active side is there are firms, and we're one of those firms that are taking net flows. That's true in both fixed as well as in equities. And then there are other firms that are redeeming at pretty high rates, where I believe some of the platforms have lost some confidence in them. And so as Dean mentioned earlier, our view has always been that — and this all is going to continue to have a place in retail portfolios. And those firms that do have something that a platform like us."

In SunLife's financial supplement, they report total revenue for Q3 2019 for MFS at $756 million. This is a 2.6 percent increase from $737 million in Q2 2019, and a 2 percent increase from $741 million in Q3 2018. Closing AUM for MFS managed funds for Q3 2019 was $222.2 billion, down 0.13 percent from $222.5 billion in Q2 2019, and down 3.4 percent from $230 million in Q3 2018. For MFS' mutual funds, AUM closed Q3 2019 at $273 billion, up 2.6 percent from $266 billion in Q2 2019, and up 4.5 percent from $254.5 billion in Q3 2018.

In Sun Life's shareholder's report, the team notes that MFS reported net inflows of $1.7 billion (USD $1.3 billion) for Q3 2019.

Overall, Sun Life Financial beats analysts' EPS expectations by C$0.13 (USD $0.09) with a Q3 GAAP EPS of C$1.15 (USD $0.86) and by C$0.10 (USD $0.07) with a Q3 Non-GAAP EPS of C$1.37 (USD $1.03).

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