Vivian Tung Talks Active Opportunities, MFS ETFs, and More

Nick Wodeshick: To get things started, it’s probably safe to say that much like 2025, 2026 is shaping up to be a deeply uncertain macroeconomic environment. We’re seeing escalating geopolitical conditions, concerns over inflation, and doubts over the Federal Reserve’s rate cutting regimen. Keeping all of this in mind, MFS obviously has plenty of experience in active management. Do you think this is going to be a year when active managers could really shine?

Vivian Tung: I do, and I think especially given our long history — we just hit our 102nd anniversary  on March 15. We’ve been in the mutual fund business for 102 years now, and we’ve seen a lot of these economic events — plenty of macro events, market volatility and economic uncertainty. 

From that perspective, MFS has a culture that fosters a disciplined approach in terms of investing for a full market cycle and staying invested across a full market cycle. We have the experience, and I think in this environment is when high conviction active managers can really home in and add value to end investors.

Nick Wodeshick: One fund in the MFS ETF library that particularly stuck out to me was the MFS Active International ETF (MFSI), both in terms of its fund flows and its performance as of late. Can you speak to that fund’s approach and why its specific take on international investing is doing so well at this moment, both in capturing attention and bringing in those compelling results?

Vivian Tung: In prior years, the US equity market has been kind of the sweetspot and it’s outperformed all kinds of indices. Now based on a number of factors,  international equities have reasserted themselves and I think people are seeing that. And as investors start diversifying out of the US, international equity markets are where they are going for that additional alpha. 

MFSI has been doing phenomenal, almost a billion dollars in assets under management. It’s no surprise to us that it has gotten so much interest. And I’d say that our partners have been great in terms of allocating to it and seeing the run rate on that particular product. And it’s a team that they’re very familiar with. 

We’re leveraging the same international equity portfolio managers that manage the overall strategy, which is offered as a mutual fund as well as an active ETF. The way in which we approach the investment process is the same, and distribution partners are familiar with the overall strategy. A lot of times, when a new ETF comes to market, many distributors don’t know who the portfolio managers are, what kind of experience they have in the asset class, etc. But in our case, they know MFS and the PM team on the overall strategy, and there’s a consistent approach, a similar track record and a level of trust that has already been built over the years.

Nick Wodeshick: MFS also recently launched a series of Blended Research ETFs, which mix fundamental and quantitative research research to help maximize returns and potentially outpace a traditional indexed strategy. Do you see that sort of approach as one that is one that is well-suited for navigating all of this uncertainty? 

Vivian Tung: Yes, in October we launched the Blended Research US Core Equity ETF as well as the Blended Research International Equity ETF. And we just recently launched a Blended Research Emerging Market Equity ETF. To your point, it blends our fundamental research with a quantitative discipline. Regarding the approach,  I think it depends on investor preference. Some folks that additional alpha above the benchmark vs. those who  are looking for a high conviction actively managed fundamentally driven portfolio. It comes down to providing choice. 

Our blended research strategies have lower targeted tracking error. Therefore, if you want that guardrail, the blended research suite may be more appropriate. But we always say that it’s not one or the other, it’s more both, since the fundamental and quantitative inputs target different parts of the market.

Nick Wodeshick: Beyond the strategies we’ve already discussed, are there any other trends and themes that you and your team are keeping an eye on as this year progresses?

Vivian Tung: Active fixed income. Last year, active ETFs in general crushed every record.,  From an asset perspective, flows perspective, launch perspective. But what’s kind of astounding is the flows going into active fixed income. And I think as investors are looking for that additional income source, this is where active fixed income managers can really shine.

It’s not a great, efficient market. And so being able to lean in on the expertise of fixed income credit research, I think that is where active fixed income managers can really shine and add additional income and additional value to clients in an active ETF vehicle.

Nick Wodeshick: Are there any specific durations or sectors of fixed income that are looking particularly appealing to your team right now? 

Vivian Tung: We’re looking at the major Morningstar categories, and from a product development perspective, we always ask where we can add value to our end clients,  can we do it well, and can we build a scalable process? If it’s yes to all three, then we’ll enter and launch products with full conviction. We are looking at some of the broader Morningstar fixed income categories and rounding out our offering to be able to provide more of those strategies to our clients over time.

Nick Wodeshick: You and I are meeting in the midst of Exchange 2026 – which is certainly a very exciting time to be in Las Vegas! We’re obviously talking right at the beginning of the conference, so what aspect of Exchange are you looking forward to the most? 

Vivian Tung:  A bunch. I feel like there’s never a shortage of innovation, , and so I’m excited to hear what’s next in the ETF market. I know there’s a session on tokenization, there’s always something about crypto and the evolution of share class. I’m interested in hearing all of it and seeing where the ETF wrapper takes us next.

Nick Wodeshick: Vivian, those are all the questions I have. Is there anything else you’d like our readers to know?

Vivian Tung: I would just emphasize the importance of responsibly innovating. Because I think that with so many different products out there now, the education and understanding of what the end investor is buying, and really taking the time to fully know what’s in the investment process. From an issuer perspective, and an asset manager perspective, it is our duty to make sure that we’re continuing to educate and differentiate, but then also really making sure that the end investor understands what they’re buying into when they buy an ETF. I just can’t stress the importance of it enough, especially when there’s so many active ETFs out there now.

For example, sometimes I don’t know if investors truly understand if  they own a physical exposure or  a derivative exposure through their purchase of an active ETF vehicle. 

And what is active now? Essentially anything that is non-passive is active. So, there is “shy active” as I like to call it, where a lot of defined outcome is considered active, but it’s really  a passive strategy with an option overlay. That might be considered active by some, less so by others. How do we differentiate between that type of active and high conviction active that MFS has been known for over a century? I think it’s incredibly important for investors to understand what they own and why and how it fits into their overall asset allocation.

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