MFS Investment Management has announced the launch of MFS Meridian Funds – Contrarian Capital Fund.
The firm writes that the fund is an actively managed global equity strategy that seeks to limit the downside by employing a bottom-up fundamental approach that looks for areas of controversy in the market so as to identify asymmetric investment opportunities.
“A controversy can take many forms. It can be anything from a conflict over cyclical versus structural pressures to a temporary impairment of the business model. The fund seeks to buy businesses trading at a discount to their intrinsic value and where a margin of safety exists on the price paid and a strong balance sheet provides enough time for the thesis to play out.
“The security selection is driven by global, bottom-up fundamental analysis and an approach unconstrained by the benchmark. Each security is screened for value, but also for change, which is arguably more difficult and requires a dedicated team of global analysts familiar with the businesses and industries involved. The fund seeks opportunities regardless of sector, geography, country or market capitalisation; sector and region positioning are a result of individual stock-picking.”
With an investment objective of long-term capital appreciation, the strategy aims to deliver above-average returns relative to the MSCI World Value index over a full market cycle. It is concentrated, generally seeking to hold between 30 and 60 securities.
The fund is available as a complementary offering to the existing MFS Meridian – Contrarian Value Fund. The firm writes that this strategy was placed on MFS’ restricted strategy list in 2023 due to capacity constraints coupled with strong demand from clients.
The fund is managed by co–portfolio managers Anne-Christine (AC) Farstad and Zahid Kassam, who are responsible for the portfolio construction process, position sizing, all buy and sell decisions and risk assessment. As institutional portfolio manager, Benjamin Tingling participates in the research process, strategy and portfolio construction discussions, assesses portfolio risk and customises segregated portfolios to help meet client objectives, the firm writes.
Commenting on the launch, Matt Weisser, Managing Director – Europe says: “At MFS we view product development as a critical success factor, and we want to offer a range of vehicles that can efficiently deliver our investment capabilities and create long-term value for our clients.
“Thus, we are pleased to launch this new global equity fund. It provides investors who are comfortable going against the crowd the opportunity to exploit the divergence between price and value in order to uncover hidden opportunities where others see uncertainty.”
