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MFS launches European credit fund

Luxembourg-domiciled fund primarily invests in euro-denominated investment-grade corporate debt instruments


David Robinson

US group MFS Investment Management has announced the launch of MFS Meridian Funds – Euro Credit Fund, a new fund that seeks to outperform the Bloomberg Barclays Euro-Aggregate Corporate Index over a full market cycle.

The fund is co-managed by Pilar Gomez-Bravo, director of Fixed Income Europe, and Andy Li, Portfolio manager – Fixed Income UK. Based in London, both are responsible for risk budgeting, asset allocation, portfolio construction, final buy and sell decisions and risk management.

The investment objective of the fund is total return with an emphasis on current income. It is based on the belief that credit securities exhibit persistent inefficiencies; therefore, it takes into consideration broader technical and structural factors across global credit markets to help predict future trends, the group said in a statement.

The fund invests primarily (at least 70%) in euro-denominated investment-grade corporate debt instruments. It may also invest in below-investment-grade debt instruments, government and government-related debt instruments, securitised instruments and non-euro-denominated debt instruments, including debt instruments of issuers in emerging markets.

Matt Weisser, managing director and head of European wholesale distribution for MFS Investment Management said: “Corporate bonds are the largest category of assets within European fixed income and as such represent a key building block for our clients. In a sustained low-interest environment, we believe that corporate credit is an attractive asset class for investors seeking income”.

MFS Meridian Funds – Euro Credit Fund is domiciled and regulated in Luxembourg, structured as a Sicav and registered in 14 countries across Europe.