MFS Releases Flexible Equity Fund

July 1, 2014 (PLANSPONSOR.com) – MFS Investment Management has released the MFS Managed Wealth Fund, a flexible equity fund that seeks to provide capital growth with moderate volatility.

The fund also aims to mitigate the effects of significant declines in equity markets. In seeking to achieve its total return investment objective, the fund will invest in three underlying MFS funds—MFS Growth Fund, MFS Value Fund and MFS Institutional International Equity Fund—for exposure to U.S. and international equities. The fund will also use derivative instruments to manage its net exposure to the equity market, based on its management team’s view of risk and reward opportunities.

“This unique fund offers investors broad global equity exposure through three well-established MFS funds, with an eye on lowering volatility,” says Jim Jessee, president of MFS Fund Distributors, Inc., and co-head of Global Distribution for MFS, based in Boston. The fund is part of MFS’s suite of outcome-oriented funds for investors and advisers looking for market exposure with strong equity diversification and risk management characteristics.

Portfolio manager James Swanson, MFS’s chief investment strategist, will serve as the fund’s lead manager. Joining him are Michael W. Roberge, MFS president and chief investment officer, William J. Adams, co-head of MFS’s Fixed Income Department, Barnaby M. Wiener, an international equity portfolio manager and Robert M. Almeida, Jr., an institutional equity portfolio manager. These portfolio managers are responsible for determining the target strategic allocations to the underlying funds and actively managing the fund’s net asset class exposure.

MFS expects the fund’s target allocation to be equally weighted among the three underlying funds. The management team will have the ability to reduce the fund’s exposure to the equity market and currency markets, and potentially add exposure to additional asset classes primarily through the use of a tactical overlay. The overlay will use derivative instruments, including futures, forward contracts, options, structured securities and swaps. In addition, MFS may seek to limit the fund’s exposure to certain extreme market events. Some investment experts believe derivative overlay strategies offer an array of benefits, which can include securitizing idle cash, maintaining policy target exposures and managing transitions within the portfolio (see “Overlay Strategy Keeps DB Investments on Target”).

The fund will be available for purchase in multiple share classes (A, B, C, I and R1 to R4) through financial advisers, financial planners, broker/dealers and other financial intermediaries and retirement platforms.

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