MFS® International Intrinsic Value Fund (Class R6 Shares) Second quarter 2021 investment report
Effective April 15, 2022, current portfolio manager Pablo de la Mata will relinquish his portfolio management responsibilities on the portfolio. NOT FDIC INSURED MAY LOSE VALUE NOT A DEPOSIT Before investing, consider the fund's investment objectives, risks, charges, and expenses. For a prospectus, or summary prospectus, containing this and other information, contact MFS or view online at mfs.com. Please read it carefully. ©2021 MFS Fund Distributors, Inc., 111 Huntington Avenue, Boston, MA 02199.
FOR DEALER AND INSTITUTIONAL USE ONLY. Not to be shown, quoted, or distributed to the public. PRPEQ-FGI-30-Jun-21 34135 Table of Contents
Contents Page
Fund Risks 1
Disciplined Investment Approach 2
Market Overview 3
Executive Summary 4
Performance 5
Attribution 6
Significant Transactions 10
Portfolio Positioning 11
Characteristics 13
Portfolio Outlook 14
Portfolio Holdings 17
Additional Disclosures 19
Country and region information contained in this report is based upon MFS classification methodology which may differ from the methodology used by individual benchmark providers. Performance and attribution results are for the fund or share class depicted and do not reflect the impact of your contributions and withdrawals. Your personal performance results may differ. Portfolio characteristics are based on equivalent exposure, which measures how a portfolio's value would change due to price changes in an asset held either directly or, in the case of a derivative contract, indirectly. The market value of the holding may differ.
0 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund PRPEQ-FGI-30-Jun-21 Fund Risks
The fund may not achieve its objective and/or you could lose money on your investment in the fund. Stock: Stock markets and investments in individual stocks are volatile and can decline significantly in response to or investor perception of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. International: Investments in foreign markets can involve greater risk and volatility than U.S. investments because of adverse market, currency, economic, industry, political, regulatory, geopolitical, or other conditions. Derivatives: Investments in derivatives can be used to take both long and short positions, be highly volatile, involve leverage (which can magnify losses), and involve risks in addition to the risks of the underlying indicator(s) on which the derivative is based, such as counterparty and liquidity risk. Intrinsic Value: The stocks of companies that MFS believes are undervalued compared to their intrinsic value can continue to be undervalued for long periods of time, may not realize their expected value, and can be volatile. Please see the prospectus for further information on these and other risk considerations.
1 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 1 PRPEQ-FGI-30-Jun-21 Disciplined Investment Approach
Investment Objective Seeks capital appreciation.
Outperform the MSCI EAFE Index (net div) over a full market cycle. The MSCI EAFE Value Index Goal (net div) is a secondary benchmark.
We believe that, a relentless focus on intrinsic value, can help manage a client's capital and generate stronger, risk-adjusted returns, over the long-run. Investment Intrinsic value is about understanding the full context of how a company's cash flows are Philosophy generated and using that understanding to develop a durable, reliable and stable notion of a company's value.
Invest rather than speculate Most market participants speculate on near-term information and over-react to short term news flow. We, on the other hand, assess investment opportunities in the context of a 10-year time horizon. Downside notupside Strategy Most market participants overemphasize the upside potential versus downside risk. We aim to avoid stocks with substantial downside risk, and only invest where we believe valuations more than compensatefor the inherent risks. Intrinsic cashflows not earnings Most investors define value from accounting earnings. We seek to gain a better notion of value through understanding the full context of how companies generate cashflows.
2 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 2 PRPEQ-FGI-30-Jun-21 Market Overview
Region performance (%) (USD) as of 30-Jun-21 Sector performance (%) (USD) as of 30-Jun-21 2Q 2021 1 Year 2Q 2021 1 Year
50.3 45.8 47.7 41.9 40.9 40.5 41.0 36.2 34.2 39.9 31.3 30.9 24.8 28.1 26.7
18.4 12.9 12.9 10.0 8.8 7.8 6.0 5.0 4.8 9.4 8.8 8.3 5.6 5.4 5.3 3.9 3.5 3.1 0.5
-0.3 -1.0 UK Japan Utilities Energy Canada Services Markets Materials Emerging Emerging Financials Industrials Consumer Consumer Estate Real Health Care Health Technology Information Discretionary Europe ex UK ex Europe UnitedStates Pacific ex Japanex Pacific Communication Communication Consumer Staples Consumer Source: FactSet. Region performance based on MSCI regional/country indexes. Source: FactSet. Sector performance based on MSCI sector classification. The analysis of MSCI EAFE Index constituents are broken out by MSCI defined sectors.
Market review as of 30-Jun-21 The global equity market rally continued in Q2 of 2021, helped by the The growing debate around inflation, even if transitory, is likely to increase further reopening of economies and expanding vaccinations despite the volatility in the market as short-term investors try to switchfrom growthto spread of COVID variants around the world. value and vice versa based on near-term news. Investors’ focus has begun to shift from the post-pandemic recovery to longer-term earnings growth.
3 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 3 PRPEQ-FGI-30-Jun-21 Executive Summary
Performance results (%) R6 shares at NAV (USD) as of 30-Jun-21 Sector weights (%) as of 30-Jun-21 Portfolio Benchmark^^ Portfolio Benchmark^ Top overweights Consumer Staples 27.2 10.5 Information Technology 25.1 9.1 Industrials 19.6 15.5 32.35 Top underweights 25.32 Financials 2.6 16.9 Health Care 2.7 12.4 Consumer Discretionary 4.1 13.0 ^^ MSCI EAFE Index 12.95 13.36 11.08 10.28 The Global Industry Classification Standard (GICS®) was developed by 8.27 8.83 and/or is the exclusive property of MSCI, Inc. and S&P Global Market 5.89 6.81 4.98 5.17 Intelligence Inc. ("S&P Global Market Intelligence"). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities 10 year 5 year 3 year 1 year YTD 2Q 2021 that are unclassified by GICS. Performance data shown represent past performance and are no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The MFS International Intrinsic Value Fund outperformed the MSCI For most recent month-end performance, please visit mfs.com. EAFE Index in the second quarter of 2021. Performance results reflect any applicable expense subsidies and waivers in effect during the Contributors Detractors periods shown. Without such subsidies and waivers the fund's performance results would be less • Materials – Stock selection • Information Technology – Stock favorable. All results assume the reinvestment of dividends and capital gains. • Industrials – Stock selection selection Shares are available without a sales charge to eligible investors. •Individual stocks: • Health Care – Underweight For periods of less than one-year returns are not annualized. - Deutsche Wohnen Ag position Source for benchmark performance SPAR, FactSet Research Systems Inc. •Individual stocks: - Pernod Ricard SA ^ MSCI EAFE (Europe, Australasia, Far East) Index (net div) - Henkel KGaA - L'Oreal - Kao Corp - Nestle SA - Kobayashi Pharmaceutical Co Ltd - SECOM Co
4 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 4 PRPEQ-FGI-30-Jun-21 Performance Results
Performance results (%) R6 shares at NAV (USD) as of 30-Jun-21
Excess return vs Period Portfolio (%) Benchmark^ (%) benchmark (%) 3Q 2020 8.55 4.80 3.76 4Q 2020 9.97 16.05 -6.07 1Q 2021 -1.72 3.48 -5.20 2Q 2021 6.81 5.17 1.64 2016 4.31 1.00 3.31 2017 27.25 25.03 2.22 2018 -8.89 -13.79 4.90 2019 25.99 22.01 3.98 2020 20.56 7.82 12.74 2021 YTD 4.98 8.83 -3.85 10 year 11.08 5.89 5.19 5 year 12.95 10.28 2.68 3 year 13.36 8.27 5.09 1 year 25.32 32.35 -7.03 Performance data shown represent past performance and are no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. For most recent month-end performance, please visit mfs.com. Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund's performance results would be less favorable. All results assume the reinvestment of dividends and capital gains. Shares are available without a sales charge to eligible investors. For periods of less than one-year returns are not annualized. Source for benchmark performance SPAR, FactSet Research Systems Inc. ^ MSCI EAFE (Europe, Australasia, Far East) Index (net div)
5 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 5 PRPEQ-FGI-30-Jun-21 Performance Drivers - Sectors
Average Relative Relative to MSCI EAFE Index (USD) - second Portfolio Benchmark Sector Stock Currency relative + + = contribution quarter 2021 returns (%) returns (%) allocation1 (%) selection2 (%) effect (%) weighting (%) (%) Contributors Materials 2.5 15.7 5.3 -0.0 0.9 0.1 1.0 Industrials 3.8 7.9 3.9 -0.1 0.7 0.1 0.7 Real Estate -0.0 18.5 5.4 0.0 0.3 0.0 0.4 Consumer Discretionary -8.8 16.2 5.6 -0.0 0.4 0.0 0.4 Communication Services -5.1 – 0.5 0.2 – 0.0 0.3 Utilities -3.6 – -1.0 0.2 – -0.0 0.2 Financials -14.7 1.9 3.5 0.3 -0.1 0.0 0.2 Energy -3.0 35.3 3.1 0.1 0.1 0.0 0.1
Detractors Information Technology 16.4 2.8 8.3 0.5 -1.4 -0.0 -0.9 Health Care -9.7 3.7 9.4 -0.4 -0.1 -0.0 -0.5 Cash 4.9 0.0 – -0.2 – -0.0 -0.3 Consumer Staples 17.1 6.4 8.8 0.5 -0.6 0.0 -0.1
Total excluding currency hedge – – 1.2 0.2 0.2 1.6
Currency hedge – – -0.0 – 0.0 0.0 Total including currency hedge 7.0 5.4 1.2 0.2 0.2 1.6 1 Sector allocation is calculated based upon each security's price in local currency. 2 Stock selection is calculated based upon each security's price in local currency and included interaction effect. Interaction effect is the portion of the portfolio's relative performance attributable to combining allocation decisions with stock selection decisions. This effect measures the relative strength of the manager's convictions. The interaction effect is the weight differential times the return differential. Attribution results are generated by the FactSet application utilizing a methodology that is widely accepted in the investment industry. Results are based upon daily holdings using a buy-and-hold methodology to generate individual security returns and do not include fees or expenses. As such, attribution results are essentially estimates and do not aggregate to the total return of the portfolio, which can be found elsewhere in this presentation. To obtain the contribution calculation methodology and a complete list of every holding’s contribution to the overall portfolio’s performance during the measurement period, please email [email protected]. The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. ("S&P Global Market Intelligence"). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS.
6 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 6 PRPEQ-FGI-30-Jun-21 Performance Drivers - Stocks
Average Weighting (%) Returns (%) Relative Relative to MSCI EAFE Index (USD) - second quarter 2021 Portfolio Benchmark Portfolio¹ Benchmark contribution (%) Contributors Givaudan SA 3.1 0.2 20.3 20.3 0.4 Deutsche Wohnen Ag 1.3 0.1 33.5 33.5 0.3 Pernod Ricard SA 2.5 0.3 18.0 18.0 0.3 Imi 1.2 – 30.6 – 0.3 L'Oreal 2.6 0.6 17.4 17.4 0.2 Detractors Cadence Design Systems Inc 4.4 – -0.1 – -0.3 Henkel KGaA 2.3 0.2 -4.5 -4.7 -0.2 Kao Corp 1.6 0.2 -6.0 -6.0 -0.2 Kobayashi Pharmaceutical Co Ltd 1.1 0.0 -8.2 -8.2 -0.2 SECOM Co 1.1 0.1 -9.7 -9.7 -0.2
1 Represents performance for the time period stock was held in portfolio. Attribution results are generated by the FactSet application utilizing a methodology that is widely accepted in the investment industry. Results are based upon daily holdings using a buy-and-hold methodology to generate individual security returns and do not include fees or expenses. As such, attribution results are essentially estimates and do not aggregate to the total return of the portfolio, which can be found elsewhere in this presentation. To obtain the contribution calculation methodology and a complete list of every holding’s contribution to the overall portfolio’s performance during the measurement period, please email [email protected].
7 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 7 PRPEQ-FGI-30-Jun-21 Significant Impacts on Performance - Contributors
Relative Relative to MSCI EAFE Index (USD) - second quarter 2021 contribution (%)
Givaudan SA The portfolio's overweight position in fragrance and flavor products manufacturer Givaudan (Switzerland) supported relative 0.4 returns as the company's like-for-like sales beat consensus estimates. Strong volume growth in the Consumer Products division of its Fragrance & Beauty segment, and a strong recovery in its Foodservices and Food Retails divisions, were the primary contributors to the stronger-than-expected earnings results. Deutsche Wohnen An overweight position in real estate company Deutsche Wohnen (Germany) contributed to relative performance. The company 0.3 reported solid first-quarter financial results, driven by like-for-like rental income growth, due in part to rental claims related to the Ag invalidity of the Berlin rent freeze. In addition, the stock price benefited from the news that real estate company Vonovia had launched a takeover offer for Deutsche Wohnen. Pernod Ricard SA An overweight position in wine, spirits, and non-alcoholic beverages manufacturer Pernod Ricard (France) bolstered relative 0.3 returns. The company reported strong third-quarter organic sales growth across the Americas, Europe and Asia. In addition, management provided favorable organic growth guidance for the full year 2021, which further supported the stock.
8 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 8 PRPEQ-FGI-30-Jun-21 Significant Impacts on Performance - Detractors
Relative Relative to MSCI EAFE Index (USD) - second quarter 2021 contribution (%)
Cadence Design The portfolio's position in Cadence Design Systems (United States), a maker of electronic design automation software used to -0.3 design semiconductor chips, weighed on relative performance. Although the company exceeded its quarterly earnings estimates Systems Inc and raised its forward guidance, the shares lagged the broader market as investors appeared to have been looking for a greater margin of outperformance. Henkel KGaA The portfolio's overweight position in chemical products company Henkel (Germany) detracted from relative returns. Although the -0.2 company reported strong organic revenue growth for the first quarter, concerns over higher raw material costs affecting margin performance, weighed on the stock.
Kao Corp The portfolio's overweight position in household and industrial products manufacturer Kao (Japan) hindered relative performance. -0.2 The company's operating profits declined substantially, particularly within its Hygiene & Living Care segment, due to a sharp fall in demand.
9 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 9 PRPEQ-FGI-30-Jun-21 Significant Transactions
Ending From 01-Apr-21 to 30-Jun-21 Sector Transaction type Trade (%) weight (%) Purchases ADIDAS AG Consumer Discretionary New position 0.5 0.6 ZALANDO SE Consumer Discretionary New position 0.4 0.5 AGILENT TECHNOLOGIES INC Health Care New position 0.3 0.3 SCHINDLER HOLDING AG Industrials Add 0.2 1.2 WOLTERS KLUWER NV Industrials Add 0.2 0.3
Sales DEUTSCHE WOHNEN SE Real Estate Trim -1.1 0.4 AMADEUS IT GROUP SA Information Technology Trim -0.8 0.9 COMPASS GROUP EQUITY Consumer Discretionary Trim -0.3 0.3 NORDSON CORP Industrials Trim -0.2 0.6 COLGATE-PALMOLIVE CO Consumer Staples Trim -0.1 1.6
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. ("S&P Global Market Intelligence"). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS.
10 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 10 PRPEQ-FGI-30-Jun-21 Sector Weights
Underweight/ As of 30-Jun-21 Portfolio (%) Benchmark^ (%) Top holdings overweight (%) Consumer Staples 27.2 10.5 16.7 Nestle SA, L'Oreal SA, Pernod Ricard SA Cadence Design Systems Inc, Taiwan Information Technology 25.1 9.1 16.0 Semiconductor Manufacturing Co Ltd ADR, ANSYS Inc Schneider Electric SE, Legrand SA, Spirax-Sarco Industrials 19.6 15.5 4.1 Engineering PLC Givaudan SA, Franco-Nevada Corp, Novozymes Materials 10.8 7.9 2.9 AS Equity Warrants 0.0 – 0.0 Cie Financiere Richemont SA Warrant Real Estate 2.1 3.0 -0.9 Vonovia SE Energy 0.2 3.2 -3.0 Core Laboratories NV Utilities – 3.4 -3.4 Communication Services – 4.9 -4.9 Consumer Discretionary 4.1 13.0 -8.9 EssilorLuxottica SA Health Care 2.7 12.4 -9.7 Terumo Corp Financials 2.6 16.9 -14.3 Euronext NV ^ MSCI EAFE Index 5.4% Cash & cash equivalents 0.2% Other. Other consists of: (i) currency derivatives and/or (ii) any derivative offsets. The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. ("S&P Global Market Intelligence"). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS.
11 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 11 PRPEQ-FGI-30-Jun-21 Region and Country Weights
Portfolio Benchmark^ Underweight/ As of 30-Jun-21 Underweight/overweight (%) (%) overweight (%) Europe ex-U.K. 44.1 50.0 -5.9 Switzerland 13.9 9.8 4.1 Europe ex-U.K. -5.9 France 15.0 11.5 3.5 Ireland 1.5 0.7 0.8 Denmark 1.9 2.6 -0.7 Finland 0.2 1.1 -0.9 United Kingdom -2.8 Germany 8.4 9.4 -1.0 Spain 0.9 2.5 -1.6 Netherlands 1.7 4.3 -2.6 Sweden 0.6 3.7 -3.1 Japan -5.9 Other countries 1 0.0 4.4 -4.4 1 Other United Kingdom 11.7 14.5 -2.8 Japan 17.3 23.2 -5.9 Asia/Pacific ex-Japan 0.0 11.8 -11.8 Asia/Pacific ex-Japan -11.8 Other countries 1 0.0 11.8 -11.8 Developed - Middle East/Africa 0.6 0.6 0.0 Israel 0.6 0.6 0.0 Developed - Middle 0.0 North America 15.5 0.0 15.5 East/Africa United States 12.0 0.0 12.0 Canada 3.5 0.0 3.5 Emerging Markets 5.2 0.0 5.2 Taiwan 3.4 0.0 3.4 North America 15.5 South Korea 1.8 0.0 1.8
Emerging Markets 5.2
^ MSCI EAFE Index 5.4% Cash & cash equivalents 0.2% Other. Other consists of: (i) currency derivatives and/or (ii) any derivative offsets. 1 The portfolio does not own any securities in countries represented in the benchmark in the following percentages: Australia 7.1%; Hong Kong 3.3%; Italy 2.5%; Singapore 1.1% and 5 countries with weights less than 1.0% which totals to 2.3%.
12 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 12 PRPEQ-FGI-30-Jun-21 Characteristics
As of 30-Jun-21 Portfolio Benchmark^ Top 10 issuers as of 30-Jun-21 Portfolio (%) Benchmark^ (%) Fundamentals - weighted average NESTLE SA 4.5 2.1 Price/earnings (12 months forward ex-negative 27.3x 16.2x earnings) CADENCE DESIGN SYSTEMS INC 4.4 – Price/book 3.9x 1.9x TAIWAN SEMICONDUCTOR 3.4 – Return on equity (3-year average) 17.5% 14.7% MANUFACTURING CO LTD Market capitalization GIVAUDAN SA 3.3 0.3 Market capitalization (USD) 1 90.4 bn 80.9 bn SCHNEIDER ELECTRIC SE 3.1 0.5 Diversification Top ten holdings 31% 13% L'OREAL SA 2.7 0.7 Number of holdings 97 844 PERNOD RICARD SA 2.6 0.3 Number of countries 16 21 DIAGEO PLC 2.2 0.7 Turnover Trailing 1 year turnover 2 8% – ANSYS INC 2.2 – Risk/reward (5 year) LEGRAND SA 2.2 0.2 Historical tracking error 6.74% – Total 30.7 4.6 Alpha 5.24% – Information ratio 0.40 – Beta 0.72 – Standard deviation 11.79% 14.66% ^ MSCI EAFE Index Past performance is no guarantee of future results. No forecasts can be guaranteed. 1 Weighted average. 2 US Turnover Methodology: (Lesser of Purchase or Sales)/Average Month End Market Value
13 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 13 PRPEQ-FGI-30-Jun-21 Portfolio Outlook and Positioning
Global equity markets continued to climb during the second quarter, with market leadership transitioning from the "reopening trade" over the prior two quarters that favored procyclical value stocks to more broad-based gains across the various sectors. Health care, consumer staples and information technology were the best performing sectors in the EAFE universe, as investors preferred higher-quality areas, while utilities, energy, communication services and financials were laggards. The rotation in leadership contributed to a more constructive environment for our investment approach, and the MFS International Intrinsic Value strategy outperformed the EAFE Index (net div) for the three-month period.
In trading activity during the second quarter, we initiated a position in German sportswear maker Adidas. The company benefits from a leadership position in the global sportswear duopoly with Nike, powered by brand, endorsements and product innovation. We’re attracted to the company's ongoing direct-to-customer shift and structurally improved margins.
We started a new investment in Germany-based Zalando, the largest European e-commerce retailer for shoes and apparel. The company is taking advantage of the structural shift to online shopping, which had reached 20% across Zalando’s European markets in 2019 and undoubtedly increased in 2020. This shift should drive margin and productivity improvements going forward.
We added to Wolters Kluwer, a Dutch information services company that provides "expert solutions," or workflow automation software, for applications in the health care, legal and accounting industries. The company is increasing the value of their offerings by converting their databases into content-driven "expert solutions," in other words, growing its digital and software mix to drive higher renewal rates and improving margins.
Where allowed, we initiated an investment in US-based medical equipment company Agilent, which provides analytical instruments, software, services and consumables for the workflow of laboratories. We favor the company's high quality, differentiated products and its focus on R&D and innovation, which is enabling share gains versus its competitors.
45748.6 14 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 14 PRPEQ-FGI-30-Jun-21 Portfolio Outlook and Positioning
We stepped up our position in German elevator company Schindler, based on the oligopolistic nature of the global elevator market. We anticipate higher returns for the company going forward, due to the newer monitoring systems in elevators, which favor the manufacturers rather than independent service providers for maintenance and repair.
We reduced our position in German residential real estate firm Deutsche Wohnen, after the stock price advanced on the announcement that rival firm Vonovia would acquire the company at an 18% premium to the prior day's closing stock price.
We pared back our investment in Spanish software firm Amadeus. While we continue to like the company's Global Distribution System business and its leading position in IT solutions for air travel and new hotels, the stock has advanced by over 50% since the vaccine approvals in early November signaled an eventual reopening of the global economy. We are downsizing the position size due to uncertainty about corporate travel volumes post-COVID.
We continued to reduce our position in Compass Group, the UK-based institutional catering firm, on concerns that the shift towards more corporate employees working from home going forward will be a headwind to the company's food service business.
Where allowed, we trimmed our position in Nordson, a US-based maker of industrial dispensing equipment, after strong outperformance and rising valuation.
Where allowed, we trimmed our holdings of Colgate Palmolive, a US-based maker of oral care and household products, on the heels of strong relative performance.
Before the pandemic began last year, we were concerned about the unprecedented levels of global debt outstanding. Over the past year, governments and central banks have initiated massive monetary and fiscal spending programs in an effort to minimize the human and economic damage of the coronavirus. While necessary to a large extent, it increases our concerns
45748.6 15 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 15 PRPEQ-FGI-30-Jun-21 Portfolio Outlook and Positioning
about ever-expanding debt levels. Inflation is accelerating, raising the question of whether the increases are transitory, due to pandemic-related dislocations, or more long-term in nature, driven by the stimulus programs.
Our view is that inflation may remain at higher levels than we had grown accustomed to in the recent years. Our response is to carefully consider which companies are likely to have pricing power that will enable them to pass along higher prices (a consideration that has always been part of our investment process). The winners in an inflationary environment are likely to be companies offering differentiated, high-value, mission-critical products to their customers. We also have established positions in three gold streaming/mining companies in the portfolio, as gold has traditionally served as an effective hedge against rising inflation.
The strategy remains overweight to information technology, focusing on computer software, systems and semiconductor companies that are dominant players in industry niches, with competitive advantages that we believe are supported by intellectual property. We are overweight consumer staples, favoring the brand name strength, global distribution networks, strong balance sheets and the ability to adapt to the digital environment across a number of consumer product, food and alcoholic beverage companies. And we are overweight industrials, owning a number of businesses that are dominant leaders in their market niches, with an emphasis on innovation to meet future customer needs.
Our most significant underweight is financials, as we continue to avoid European and Japanese banks with complicated business models and overlevered balance sheets. We are underweight health care, on concerns about patent cliffs, the high cost of drug development and increasing government pressure on drug prices, and we are underweight consumer discretionary, as fewer businesses meet our criteria for sustainability over the long term.
The commentary included in this report was based on a representative fully discretionary portfolio for this product style; as such the commentary may include securities not held in your portfolio due to account, fund, or other limits.
45748.6 16 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 16 PRPEQ-FGI-30-Jun-21 Portfolio Holdings
Equivalent Equivalent As of 30-Jun-21 Country As of 30-Jun-21 Country exposure (%) exposure (%) Cash & Cash Equivalents 5.4 Equity Warrants 0.0 Cash & Cash Equivalents 5.4 Cie Financiere Richemont SA Warrant Switzerland 0.0 Consumer Discretionary 4.1 Financials 2.6 EssilorLuxottica SA France 0.9 Euronext NV France 0.6 Cie Financiere Richemont SA Switzerland 0.8 UBS Group AG Switzerland 0.5 LVMH Moet Hennessy Louis Vuitton SE France 0.6 Julius Baer Group Ltd Switzerland 0.3 adidas AG Germany 0.6 Hiscox Ltd United Kingdom 0.3 Cie Generale des Etablissements Michelin SCA France 0.5 Jyske Bank AS Denmark 0.2 Zalando SE Germany 0.5 Chiba Bank Ltd Japan 0.2 Compass Group PLC United Kingdom 0.3 Sydbank AS Denmark 0.2 Consumer Staples 27.2 Mebuki Financial Group Inc Japan 0.1 Nestle SA Switzerland 4.5 Hachijuni Bank Ltd Japan 0.1 L'Oreal SA France 2.7 North Pacific Bank Ltd Japan 0.1 Pernod Ricard SA France 2.6 Health Care 2.7 Diageo PLC United Kingdom 2.2 Terumo Corp Japan 0.8 Henkel AG & Co KGaA IPS Germany 2.1 Santen Pharmaceutical Co Ltd Japan 0.7 Reckitt Benckiser Group PLC United Kingdom 2.0 Nihon Kohden Corp Japan 0.7 Colgate-Palmolive Co United States 1.6 Agilent Technologies Inc United States 0.3 Kao Corp Japan 1.5 Bruker Corp United States 0.2 Heineken NV Netherlands 1.4 Industrials 19.6 Ito En Ltd Japan 1.1 Schneider Electric SE France 3.1 Kobayashi Pharmaceutical Co Ltd Japan 1.0 Legrand SA France 2.2 Toyo Suisan Kaisha Ltd Japan 0.9 Spirax-Sarco Engineering PLC United Kingdom 1.5 Danone SA France 0.9 SGS SA Switzerland 1.5 Kerry Group PLC Ireland 0.7 IMI PLC United Kingdom 1.3 Rohto Pharmaceutical Co Ltd Japan 0.7 Experian PLC United Kingdom 1.2 Ezaki Glico Co Ltd Japan 0.4 Schindler Holding AG Switzerland 1.2 Nissin Foods Holdings Co Ltd Japan 0.2 SMC Corp Japan 1.1 Kose Corp Japan 0.2 Secom Co Ltd Japan 1.0 Lion Corp Japan 0.2 Intertek Group PLC United Kingdom 0.9 Lindt & Spruengli AG Switzerland 0.2 Geberit AG Switzerland 0.8 Energy 0.2 Ryanair Holdings PLC ADR Ireland 0.7 Core Laboratories NV United States 0.2 GEA Group AG Germany 0.7
17 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 17 PRPEQ-FGI-30-Jun-21 Portfolio Holdings
Equivalent Equivalent As of 30-Jun-21 Country As of 30-Jun-21 Country exposure (%) exposure (%) Industrials 19.6 Materials 10.8 Nordson Corp United States 0.6 Symrise AG Germany 1.2 Epiroc AB Sweden 0.6 Sika AG Switzerland 0.8 Knorr-Bremse AG Germany 0.4 Agnico Eagle Mines Ltd Canada 0.6 Wolters Kluwer NV Netherlands 0.3 Wheaton Precious Metals Corp Canada 0.5 Sohgo Security Services Co Ltd Japan 0.3 Kansai Paint Co Ltd Japan 0.4 Wartsila OYJ Abp Finland 0.2 Croda International PLC United Kingdom 0.4 Information Technology 25.1 Other 0.2 Cadence Design Systems Inc United States 4.4 Other 0.2 Taiwan Semiconductor Manufacturing Co Ltd ADR Taiwan 3.4 Real Estate 2.1 ANSYS Inc United States 2.2 Vonovia SE Germany 0.7 Analog Devices Inc United States 1.9 LEG Immobilien SE Germany 0.6 Samsung Electronics Co Ltd South Korea 1.8 TAG Immobilien AG Germany 0.5 Shimadzu Corp Japan 1.3 Deutsche Wohnen SE Germany 0.4 Hirose Electric Co Ltd Japan 1.2 Other consists of: (i) currency derivatives and/or (ii) any derivative offsets. Halma PLC United Kingdom 1.0 The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. ("S&P Global Dassault Systemes SE France 1.0 Market Intelligence"). GICS is a service mark of MSCI and S&P Global Market Amadeus IT Group SA Spain 0.9 Intelligence and has been licensed for use by MFS. MFS has applied its own internal Obic Co Ltd Japan 0.8 sector/industry classification methodology for equity securities and non-equity Nomura Research Institute Ltd Japan 0.8 securities that are unclassified by GICS. Omron Corp Japan 0.7 Spectris PLC United Kingdom 0.7 SAP SE Germany 0.7 Texas Instruments Inc United States 0.6 Wix.com Ltd Israel 0.6 Disco Corp Japan 0.3 Descartes Systems Group Inc Canada 0.3 Yokogawa Electric Corp Japan 0.3 Infineon Technologies AG Germany 0.2 Materials 10.8 Givaudan SA Switzerland 3.3 Franco-Nevada Corp Canada 2.1 Novozymes AS Denmark 1.6
18 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 18 PRPEQ-FGI-30-Jun-21 Additional Disclosures
Index data source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.
19 FOR DEALER AND INSTITUTIONAL USE ONLY. - MFS International Intrinsic Value Fund 19 PRPEQ-FGI-30-Jun-21