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MFS launches global opportunistic bond fund

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MFS Investment Management has launched the MFS Meridian Funds – Global Opportunistic Bond Fund, a flexible fixed income fund designed to generate returns from a diversity of alpha sources through variable market conditions.

The investment strategy is based on the belief that global fixed income markets offer a diverse range of opportunities to add value, including global sector allocation, security selection, duration and currency management over a market cycle.
 
Primarily, the fund focuses its investments in issuers located in developed markets, but may also invest in emerging markets. The fund will invest in corporate and government issuers and mortgage-backed and other asset-backed securities, as well as investment-grade and below-investment-grade debt instruments.
 
The fund aims to allocate risk where it is most attractively priced in order to generate returns.
 
While the portfolio has the ability to meaningfully allocate to various sectors, including riskier segments of the fixed income markets, the fund uses a benchmark-aware approach that seeks to balance higher yield and total return potential while still providing the diversification benefits traditionally offered by fixed income.
 
“The need for enhanced fixed income return potential is real in the current slow-growth, low-rate environment. In our view, different sources of alpha are likely to drive performance, depending on market conditions, and so the ability to allocate across different opportunities enhances efforts to generate performance,” says Lina Medeiros (pictured), president of MFS International.
 
In an effort to manage exposure to particular areas of the markets, the fund is expected to use derivatives primarily for hedging and/or investment purposes.
 
Richard Hawkins and Robert Spector serve as the fund's lead managers and are responsible for asset allocation and risk budgeting in the portfolio. They work with a group of sector-level portfolio managers who in addition to providing insights on relative value for their sectors, are responsible for buy and sell recommendations within their sectors.

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