Toronto-based MFS Investment Management Canada Ltd. has changed its Canadian MFS LifePlan funds to address the home-country investment bias that is affecting retirement savings of some investors, the firm says. Although traditional target-date funds base asset-allocation decisions on factors such as the plan participant’s age of retirement, life expectancy, savings and spending habits, the Canadian MFS LifePlan funds take into account investment objectives, as well as the participant’s level of risk tolerance and that the ability to withstand and recover from losses is time-dependent. The funds now will invest in a diversified portfolio of actively managed MFS Canadian equity, global equity, fixed-income and real estate funds. These funds will be managed by MFS’s quantitative solutions team and will seek to reduce some of the risks associated with investing predominantly in home-country assets. “For young and middle-aged investors, this home-country bias can have a significant impact on retirement portfolios in the event of a local downturn, as we saw over the past decade,” says Shawn Cohen, director of relationship management with MFS. The new funds are designed to help ensure that unitholders remain globally diversified, especially early in their investment careers, to help to dampen country-specific risk while taking advantage of a broader pool of global investments.
(cohara@investmentexecutive.com).
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