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MFS Launches Global Long/Short Equity Fund

Amisha Mehta Assistant Editor 17 March 2016

MFS Launches Global Long/Short Equity Fund

The global asset manager has boosted its equity offering with a Luxembourg-domiciled fund.

MFS Investment Management has launched MFS Meridian Funds – Managed Wealth Fund, a global long/short equity fund that seeks total returns with less volatility than the broad equity market.

The fund's portfolio construction process is three-fold, comprising strategic global equity allocation, flexible market exposure and systematic hedges aimed at managing tail risk dislocations.

“We are seeing significant and growing client demand for outcome-oriented funds with strong diversification and risk management characteristics. In today's investment environment, we believe investors may be looking to diversify their portfolios with flexible equity funds that have the ability to adapt to market conditions at times of volatility,” said Lina Medeiros, president of MFS International.

James Swanson, MFS's chief investment strategist, will serve as the fund's lead manager. Jonathan Sage will be responsible for stock selection in the portfolio. The fund managers will use an 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 investments.

If necessary, the fund will also adopt a tail risk hedging strategy, using options to hedge against severe market dislocations. Allocations to this strategy are kept relatively small to limit costs, the firm said.

As of the end of last month, MFS managed $395.6 billion in assets on behalf of individual and institutional investors worldwide. The firm has offices in Boston, Hong Kong, London, Mexico City, São Paulo, Singapore, Sydney, Tokyo and Toronto.

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