Investor appetites for international equities could continue after the Fed implemented a second rate cut. Investors looking to get international equities exposure would be wise to consider using an actively managed fund like the MFS Active International ETF (MFSI ) .
Additional rate cuts are expected following October’s second rate cut of the year. But one more in December doesn’t carry a 100% guarantee. Federal Reserve Chairman Powell emphasized dissenting views among Fed members on the future direction of interest rate policy.
“He emphasized that there were strongly differing views on the [committee. And] some think it would be wise to skip a meeting amid signs of stronger growth, still sticky inflation and the government data blackout,” noted Jamie Coleman, MFS senior strategist, in a recent market insight: Trade Truce, December FOMC in Focus.
Nonetheless, the prevailing sentiment is the Fed will implement more cuts in 2026, which could help sustain ongoing migration to opportunities abroad. This opens the door for investors to seek an actively managed strategy that MFSI uses.
The Active Advantage
While offering opportunities for portfolio diversification, international investing carries its own set of unique risks. Geopolitical and economic risks can vary from country to country. Tariffs continue to be a wild card in international investing. That only adds to the additional uncertainty that comes with investing outside of U.S. borders.
Given these nuanced market characteristics, MFSI can provide benefits to investors. According to MFSI’s product website, the fund seeks to develop a well-diversified portfolio focused on equities that exhibit a growth-at-a-reasonable price style with a quality bias. With a discerning eye on quality, MFSI seeks equities that are trading at a discount to their projected value with strong growth potential.
“MFS has a century-long history in active management, and that legacy influences the way we manage ETFs.” Said Jamie Harrison, Head of ETF Capital Markets, “When an investor buys an MFS ETF, they’re investing in the same commitment to excellence and client focus that has driven our firm’s success for over a century.”
MFSI is deeply diversified. It provides U.S. investors with a home country bias more opportunities to capture upside in other sectors. The information technology sector in the U.S. has certainly propelled much of the gains for 2025. But MFSI’s weightings (as of October 31, 2025) tilt toward financials (23.5%) and industrials (16.5%) with information technology (16.3%) coming in third in its top three sector weightings.
Weakening Dollar Boosts International Profile
As mentioned earlier, a weakening dollar from further rate cuts could give the investment profile for international equities a further catalyst for outperformance. The strength of international economies can typically be tied to the strength of their local currencies so a declining dollar can help in this regard.
The divergence in the strength of international equities and the weakness in the U.S dollar could continue with the prospect of further rate cuts. MFSI is poised to capture this upside.
For more news, information, and analysis, visit the Portfolio Construction Content Hub.
