MFS Investment Management has announced the launch of the MFS Meridian Funds – Contrarian Value Fund. This is a new unrestricted global equity fund that is not afraid to get involved in controversial areas of the market in order to identify companies that experience operational difficulties or that go through complicated transitions.
A controversy can take many forms
It can be anything from a conflict over cyclical pressures to structural pressures to a temporary deterioration of the business model. The fund tries to acquire companies that quote at a discount with respect to their intrinsic value, have a margin of safety in the price paid and exhibit a solid balance that provides enough time for the investment thesis to materialize.
Given that the fund’s investment objective is to achieve long-term capital appreciation, the fund seeks to exceed the profitability of the MSCI World Value index in full market cycles. It is a concentrated fund that generally maintains less than 50 values.
Anne-Christine Farstad will be the fund manager
The fund is managed by the manager Anne-Christine Farstad, who is responsible for all the final purchase and sale decisions, as well as the construction of the portfolio. By adopting a bottom-up approach based on exhaustive analysis, the fund generally combines three types of ideas: companies that it deems undervalued (deep value), companies in the process of restructuring, or quality values that experience difficulties. Each investment is evaluated with respect to value, and also with respect to its processes of change, which could be said to be more difficult and requires a dedicated team of global analysts familiar with the appropriate companies and sectors, which are a fundamental part of the process.
“In our opinion, there are exceptional opportunities for those investors willing to have a differentiated approach and adopt a long-term vision. We believe that the current debate about the growth style versus the value style generates a false dichotomy; the true market anomaly revolves around the stability of these companies against their market value and, at present, the value style seems cheap both in absolute and relative terms.Matt Weisser, CEO and head of wholesale distribution in Europe at MFS Investment Management
The MFS Meridian Funds – Contrarian Value Fund is domiciled and regulated in Luxembourg, with a structure of “SICAV S.A.”, in addition to being registered in 14 countries throughout Europe.