MFS launches managed wealth fund

MFS Investment Management has announced the launch of MFS Meridian Funds – Managed Wealth fund, a global long/short equity fund that seeks total returns with less volatility than the broad global equity market by using a tactical asset allocation overlay.

The fund’s investment strategy is based on the belief that equities offer the most attractive long-term return potential, but also that prudent consideration of market dynamics may warrant a reduction in net equity exposure.

The fund employs a consistent portfolio construction process that consists of three distinct parts: strategic global equity allocation, flexible market exposure and systematic hedges to help manage tail risk dislocations.

The fund offers investors access to MFS’ blended research process, which combines MFS’ fundamental and quantitative research capabilities to select global stocks for the portfolio.

In addition, the fund managers use a tactical asset allocation overlay that employs derivative instruments in an effort to decrease the volatility of the fund’s returns by reducing its exposure to equity or currency markets associated with its portfolio investments.

In an effort to dampen volatility, the fund may also utilise a tail risk hedging strategy, selectively using options to hedge against severe market dislocations. Allocations to the tail risk hedging strategy are kept relatively small to limit costs to the portfolio while limiting its exposure to dramatic market dislocations.

Portfolio manager James Swanson, MFS’ chief investment strategist, will serve as the fund’s lead manager. Jonathan Sage, portfolio manager will be responsible for stock selection in the portfolio.

Michael W. Roberge, MFS president and chief investment officer; William J. Adams, CIO of Global Fixed Income; Barnaby M. Wiener, equity portfolio manager; Robert M. Almeida, Jr., equity portfolio manager; and James Swanson will collectively determine the fund’s net asset class exposure.

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