August 9, 2018 / 3:46 PM / 3 months ago

UPDATE 1-Canada's Sun Life shares fall on U.S. asset manager outflows

* Shares fall as much as 4.2 percent

* MFS boss says clients are de-risking amid trade concerns (Adds comments from head of unit)

By Matt Scuffham

TORONTO, Aug 9 (Reuters) - Shares in Canadian insurer Sun Life fell as much as 4.2 percent on Thursday after analysts expressed concern about the performance of its U.S. asset management business, MFS Investment Management.

Sun Life on Wednesday reported second-quarter earnings that were ahead of market expectations, helped by a strong performance from its Asian businesses.

However, it said MFS experienced net outflows of $11.5 billion in the quarter, up from $4.3 billion last quarter.

On a conference call with analysts, MFS Chief Executive Mike Roberge said the outflows reflected clients de-risking their portfolios by selling off equities while markets are strong and re-allocating funds to fixed income investments.

“Because our institutional book is skewed to equities, that has an impact on us,” he said.

Roberge also said global trade concerns were encouraging clients to seek safe havens for funds.

“The trade backdrop has clearly got people cautious,” he said. “They’re staying on their hands a little bit and, if you look at flows, de-risking to some extent.”

RBC analyst Darko Mihelic said MFS’s net outflows in the quarter were more than the $10.7 billion he had expected and also noted that MFS’s operating margin had declined.

“We think the market is likely to react negatively to MFS results in the near term,” he said.

By 11.20 a.m. ET (1520 GMT), Sun Life shares had recovered some of their losses, to trade down 1.6 percent.

Shares in rival Manulife, which reported second-quarter earnings that were better-than-expected on Wednesday, were up 1.4 percent. (Reporting by Matt Scuffham Editing by Bill Trott and Susan Thomas)

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