Core Insights - The equity market in 2025 has been challenging, with expectations that 2026 will follow suit, yet there are still attractive investment opportunities available for informed investors [1] U.S. Equity Market - Valuations in the S&P 500 are high compared to historical standards, necessitating an understanding of the underlying causes to identify strong investment opportunities [2] - The "Magnificent Seven" companies have significantly contributed to the valuation increase, benefiting from trends in cloud computing and artificial intelligence [3] - Corporate profits have risen due to lower net interest expenses, and large-cap companies have effectively passed inflationary costs onto consumers [4] - The ability to sustain growth, defend margins, and maintain pricing power should be assessed at the company level as market conditions evolve [5] - The MFS Active Growth ETF (MFSG) targets high-quality U.S. companies with competitive advantages and pricing power, utilizing a bottom-up approach for active management [6] European Equity Market - European equity valuations are currently more attractive, driven by factors such as increased German fiscal spending and rate cuts from the European Central Bank [7] - European companies with a domestic revenue focus have shown strong performance, with the financial sector being a key driver, as banks remain profitable despite rate cuts and limited tariff exposure [8] - The MFS Active International ETF (MFSI) offers a diversified approach to international exposure, focusing on high-conviction portfolios with a quality tilt [9] - MFSI's strategy emphasizes stocks trading at discounts to their projected value, aiming for alpha generation through selective high-quality stock investments [10] - As of October 31, 2025, MFSI has allocated over 36.51% of its assets to European companies, with 11.60% specifically in the United Kingdom, allowing for a diversified investment in the European market [11]

Core Viewpoint - The current market environment is characterized by a focus on large-cap growth, particularly in the tech sector, driven by AI themes, with active strategies like the MFS Active Growth ETF (MFSG) offering potential advantages over passive funds [1][2]. Group 1: Market Environment - The emphasis on large-cap growth is particularly evident with companies like Nvidia, Microsoft, and Apple, which are part of the "Magnificent Seven" [1]. - The AI theme is propelling much of the market performance in 2025, attracting investor interest [1]. Group 2: Active vs. Passive Funds - Active funds are increasingly sought after in a market with rising uncertainty due to various factors such as inflation and geopolitical tensions [2]. - The MFS Active Growth ETF (MFSG) distinguishes itself by leveraging the expertise of MFS portfolio managers and a global network of over 50 equity research analysts [2]. Group 3: Investment Strategy - MFSG employs a bottom-up approach to select holdings, focusing on companies with strong economic moats and competitive advantages [3]. - The fund's active strategy allows for flexibility in adjusting its portfolio over time, targeting high-level investment themes such as AI and healthcare innovation [3][4]. Group 4: Fund Characteristics - MFSG aims to build a growth portfolio of companies that can deliver steady, above-average growth rates that may be undervalued by the broader market [4]. - The fund has a competitive expense ratio of 0.49%, which is lower than the FactSet Segment Average of 0.61%, making it a cost-effective option for growth exposure [5]. Group 5: Performance Potential - The fund's tailored holdings are designed to potentially outperform benchmark passive indexes over a full market cycle [6]. - Portfolio managers have the flexibility to adjust holdings to capture upside or mitigate downside risks [6]. - MFSG targets companies with sustainable high growth potential, enhancing its investment strategy [6].