Closed my MFC position. Here’s why. Curious to hear takes on the Asia piece.

TLDR: Bought MFC last year for the Asia growth story. Volume showed up, profitability did not. NBV margins in Asia sit near 40% and struggle to move higher. U.S. segment is choppy, Global WAM is steady but not a needle mover. At 14–15x earnings and 1.7x book, I see balanced risk/reward. I sold and will redeploy into ideas with cleaner upside. If you think the Asia thesis has more juice, convince me.

Why I bought

• Thought Asia would be the growth engine with improving profitability as mix shifted toward protection and health.
• Expected rising NBV margins and a rerate as risk came down and capital returns stepped up.

What actually happened

• Asia kept growing volumes, but margins did not break out. NBV margin sits around ~40% and can slip when mix tilts to lower margin savings products.
• Competition is real. AIA and Prudential defend agent networks and high value customers. Winning share costs money, which hits margins.
• U.S. results were uneven, with claims and some credit provisions biting at times. Global WAM did fine, just not enough to drive a big EPS step up.

Valuation today

• Roughly 14–15x earnings, ~1.7x book. Middle of the pack.
• The easy multiple expansion looks done. You are basically paid a decent dividend to own a steady insurer.
• I reran my model with more grounded assumptions by region. Asia growth mid single digits, stable margins, Canada and U.S. near GDP, WAM mid single digits, expense ratio holding near current levels, cost of equity about 10, terminal multiple around 13x on normalized EPS.
• That lands me near US$30 fair value, about C$42. Stock trades a bit above that. Upside feels capped unless Asia margins inflect.

What would change my mind

• Clear shift in Asia mix toward higher margin protection and health at scale.
• NBV margins grinding from low 40s toward mid 40s and holding there.
• Evidence that digital tools are lifting agency productivity and lowering acquisition costs in multiple markets.
• U.S. segment showing fewer claims surprises and steadier spreads.

Risks to selling

• If Asia margins jump faster than I expect, EPS can beat and price follows even without a higher multiple.
• Strong markets could lift Global WAM flows and fees more than I am modeling.

Why I sold now

• Opportunity cost. Good company, solid balance sheet, clean dividend policy. But from here the skew looks even. I prefer asymmetric setups with a clearer edge. I took the ~16% total return and moved the capital to ideas with better upside.

Not trying to dunk on MFC. It is a quality insurer with a real dividend. I just do not see a durable edge in Asia yet, and the valuation no longer bails me out. Open to pushback, especially from anyone with boots on the ground in HK, China, Japan, or ASEAN.