Asset Allocation Diversification – 20 Years of the Best and Worst Everyone wants to be in the best-performing asset class every year. The thing is, few people are savvy enough to consistently choose the best. That’s why diversification is key. This chart shows annual returns for eight broad-based asset classes, cash and a diversified portfolio ranked from best to worst. Notice how the “leadership” changes from year to year, and how competitively the diversified portfolio performed over 20 years (see the “average” column). 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 AVERAGE Small/ Large Cap Small/ Large Cap Small/ Large Cap Large Cap Large Cap REITs Commodities REITs Commodities REITs Commodities Bonds REITs Bonds REITs REITs Cash REITs Mid Cap Growth Mid Cap Growth Mid Cap Growth Growth Growth 15.50% 25.91% 30.41% 21.36% 34.35% 16.23% 5.24% 27.58% 7.84% 20.14% 27.15% 1.86% 9.71% 45.51% 37.21% 36.80% 5.67% 17.59% 30.21% 36.39% 38.49% Global Large Cap Global Small/ Small/ Small/ Large Cap Large Cap Large Small/ Small/ Bonds International International International International REITs REITs International Bonds REITs Bonds Growth Bonds Mid Cap Mid Cap Mid Cap Growth Value Cap Value Mid Cap Mid Cap BEST 8.44% 38.59% 20.25% 13.54% 26.34% 7.28% 2.29% 25.03% 0.01% 28.07% 16.53% 11.81% 4.79% 34.39% 26.71% 17.88% 33.48% 13.45% 17.34% 19.99% 9.44% Small/ Large Cap Global Large Cap Large Cap Large Cap Small/ Global Small/ Diversified Large Cap Cash Bonds REITs REITs International Cash International Commodities Bonds Commodities Mid Cap Value Bonds Value Value Growth Mid Cap Bonds Mid Cap Portfolio Growth 4.09% 10.25% 38.47% 8.29% 11.17% 1.80% 31.78% 16.83% 0.55% 11.77% 18.29% 22.25% 5.64% 17.51% 32.53% 13.05% 16.81% -1.20% 27.77% 10.58% 8.27% Global Large Cap Large Cap Small/ Small/ Global Diversified Large Cap Large Cap Small/ Large Large Cap Large Cap Global Large Cap REITs REITs International International Cash REITs Bonds Value Value Mid Cap Mid Cap Bonds Portfolio Growth Growth Mid Cap Cap Value Growth Value Bonds Value 5.22% 27.45% 17.32% 22.78% 0.03% 9.28% 1.57% 30.03% 16.49% 8.11% 16.17% 9.48% -27.54% 16.71% 2.64% 7.07% 13.66% –1.51% 26.54% 9.20% 6.82% Small/ Large Cap Diversified Diversified Diversified Diversified Diversified Large Cap Large Cap Diversified Diversified Diversified Diversified Cash Bonds Commodities Bonds International REITs International International Mid Cap Growth Portfolio Portfolio Portfolio Portfolio Portfolio Value Growth Portfolio Portfolio Portfolio Portfolio 1.70% 6.97% –35.65% 5.97% -0.81% –4.10% 22.01% 7.82% 1.22% 29.75% 14.48% 7.92% 15.02% 23.72% 15.73% 0.39% 15.26% 13.41% 8.72% 13.21% 6.65% Diversified Diversified Diversified Global Large Cap Large Cap Small/ Large Cap Large Cap Diversified Diversified Small/ Large Cap Diversified Diversified Cash Cash REITs REITs Bonds Bonds Portfolio Portfolio Portfolio Bonds Value Growth Mid Cap Value Value Portfolio Portfolio Mid Cap Growth Portfolio Portfolio RETURN ANNUAL 4.74% 0.08% 3.21% 9.27% 7.51% 4.83% –4.75% –2.91% 27.75% 9.27% 7.05% 9.07% –36.79% 19.69% 15.51% 12.02% 5.32% –2.90% 7.08% -5.98% 20.33% Large Cap Large Cap Large Cap Global Diversified Large Cap Diversified Global Global Global Global Large Large Global Commodities Commodities Commodities International Cash Bonds Bonds Value Value Growth Bonds Portfolio Value Portfolio Bonds Bonds Bonds Bonds Cap Value Cap Value Bonds 23.93% 9.15% 18.91% 7.75% 0.05% 2.65% 8.72% –5.59% –15.52% 5.26% 6.64% 4.69% –36.85% -0.16% 4.32% 0.59% –3.15% 7.39% –8.27% 2.80% 4.76% Global Large Cap Small/ Global Small/ Diversified Global Small/ Commodities International Cash Cash REITs Bonds Bonds Bonds Cash Bonds Commodities Cash International Bonds Growth Mid Cap Bonds Mid Cap Portfolio Bonds Mid Cap –19.51% –15.94% 3.00% 4.76% –37.34% 6.54% 4.21% –2.02% 0.03% 3.54% 7.69% 0.58% 4.50% 12.51% 6.30% 1.38% 6.93% –2.51% -3.33% 2.09% –10.00% Large Cap Small/ Large Cap Large Cap Global Global Large Global Bonds Bonds Bonds Bonds Bonds International Cash International International Commodities Commodities Commodities Cash Growth Mid Cap Value Growth Bonds Bonds Cap Value Bonds 4.10% 4.34% 2.43% 4.33% 5.93% –12.14% 0.07% –4.90% 1.00% 1.70% –11.25% –3.12% 1.43% –20.42% –17.80% –0.17% –38.44% 5.54% –2.60% –3.83% 6.84% WORST Large Cap Global International Cash Cash Commodities REITs International Cash Cash Commodities Commodities Commodities Commodities Commodities Cash Cash International Cash REITs Commodities Growth Bonds –21.44% 1.07% 1.24% 2.07% –17.83% –43.38% 0.16% 0.13% –13.32% –1.06% –9.52% –17.01% –24.66% 0.27% 0.84% –13.79% 2.25% –5.86% –0.52% –27.88% –4.49% Source: SPAR, FactSet Research Systems Inc. MARKET SEGMENT REPRESENTED BY *20 YEARS ENDED 12/31/20 STANDARD DEVIATION* IMPORTANT RISK CONSIDERATIONS 1 Cash FTSE 3-month T-bill Index 0.45 International: Investing in foreign and/or emerging market securities involves interest rate, currency exchange rate, economic, Bonds Bloomberg Barclays US Aggregate Bond Index2 3.41 and political risks. These risks are magnified in emerging or developing markets as compared with domestic markets.Small/Mid Cap Global bonds Bloomberg Barclays Global Aggregate Index (Unhedged)3 5.48 stocks: Investing in small and/or mid-sized companies involves more risk than that customarily associated with investing in more- Diversified portfolio Equal allocations of all segments disclosed herein, excluding cash 11.20 established companies. Bonds: Bonds, if held to maturity, provide a fixed rate of return and a fixed principal value. Bond funds will Large Cap Value stocks Russell 1000® Value Index4 15.34 fluctuate and, when redeemed, may be worth more or less than their original cost. Commodities Bloomberg Commodity Index5 15.90 The historical performance of each index cited is provided to illustrate market trends; it does not represent the performance Large Cap Growth stocks Russell 1000® Growth Index6 16.55 of a particular MFS® investment product. It is not possible to invest directly in an index. Index performance does not take into International stocks MSCI EAFE Index7 16.94 account fees and expenses. Past performance is no guarantee of future results. The investments you choose should correspond Small/Mid Cap stocks Russell 2500TM Index8 18.75 to your financial needs, goals, and risk tolerance. For assistance in determining your financial situation, consult an investment REITs FTSE NAREIT All REITs Total Return Index9 20.06 professional. For more information on any MFS product, including performance, please visit mfs.com. NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE See next page for important information. Note that the diversified portfolio’s assets were rebalanced at the end of every quarter to maintain the equal allocations throughout the period. Standard deviation reflects a portfolio’s total return volatility, which is based on a minimum of 36 monthly returns. The larger the portfolio’s standard deviation, the greater the portfolio’s volatility. Diversification does not guarantee a profit or protect against a loss. A Case for Asset Allocation Diversification Looking to balance risk with potential returns? ASSET ALLOCATION STRATEGIES AND UNDERLYING FUNDS Diversifying your assets can work if you and your financial advisor or investment MUTUAL FUND CLASS I CLASS R6 CLASS A MORNINGSTAR CATEGORY professional also examine how much risk you’re willing to take. Finding your ASSET ALLOCATION STRATEGIES MFS® Conservative Allocation Fund MACIX — MACFX Allocation – 30% to 50% Equity comfort zone in the asset allocation pies below will help determine how your MFS® Moderate Allocation Fund MMAIX — MAMAX Allocation – 50% to 70% Equity ® assets could be invested. See the table at right for MFS portfolios to consider. MFS® Growth Allocation Fund MGWIX — MAGWX Allocation – 70% to 85% Equity MFS® Aggressive Growth Allocation Fund MIAGX — MAAGX Allocation – 85%+ Equity MFS® Conservative MFS® Growth Allocation Fund Allocation Fund U.S. EQUITY MFS® Growth Fund MFEIX MFEKX MFEGX Large Growth RISK 10, 11, 12, 13, 14 RISK 10, 11, 12, 13, 14 MFS® Mid Cap Growth Fund OTCIX OTCKX OTCAX Mid-Cap Growth Specialty/Alternative 4% Specialty/Alternative 8% MFS® Mid Cap Value Fund MCVIX MVCKX MVCAX Mid-Cap Value ® US Equity 28% Fixed Income 20% MFS New Discovery Fund MNDIX MNDKX MNDAX Small Growth MFS® New Discovery Value Fund* NDVIX NDVVX NDVAX Small Value Global/ ® Global/ International Equity 20% MFS Research Fund MRFIX MFRKX MFRFX Large Blend International Equity 8% MFS® Value Fund MEIIX MEIKX MEIAX Large Value US Equity 52% Fixed Income 60% GLOBAL/INTERNATIONAL EQUITY MFS® Emerging Markets Equity Fund MEMIX MEMJX MEMAX Diversified Emerging Markets MFS® Moderate MFS® Aggressive Growth MFS® International Growth Fund MQGIX MGRDX MGRAX Foreign Large Growth Allocation Fund Allocation Fund MFS® International New Discovery Fund**** MWNIX MIDLX MIDAX Foreign Small/Mid Growth ® RISK 10, 11, 12, 13, 14 RISK 10, 11, 13, 14 MFS International Intrinsic Value Fund*** MINIX MINJX MGIAX Foreign Large Growth MFS® Research International Fund MRSIX MRSKX MRSAX Foreign Large Blend Specialty/Alternative 6% Specialty/Alternative 10% FIXED INCOME US Equity 41% US Equity 60% MFS® Emerging Markets Debt Fund MEDIX MEDHX MEDAX Emerging Markets Bond Fixed Income 40% Global/ MFS® Emerging Markets Debt Local Currency Fund EMLIX EMLNX EMLAX Emerging-Markets Local-Currency Bond International Equity 30% MFS® Global Bond Fund MGBJX MGBOX MGBAX World Bond Global/ International Equity 13% MFS® Government Securities Fund MGSIX MFGKX MFGSX Intermediate Government ® Target allocations shown.