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MFS Launches Target Total Return Fund

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MFS Investment Management unveiled a new Diversified Target Return Fund (DVRAX) that will use quantitative as well as fundamental analysis in its investment strategy, and aims at “a target total return that meets or exceeds the rate of inflation over a full market cycle by five percentage points,” while at the same time “seeking lower correlation and lower volatility relative to the broader equity market.”

Boston-based MFS says in its February 4 announcement that the fund’s managers will invest without regard to market cap, style, industry or region, and may short securities and take positions in fixed income. A sub-advisor, UBS Global Asset Management (Americas) Inc. will use derivatives “to actively manage the fund’s market and currency exposures.”

The lead portfolio managers will be Joseph Flaherty, co-director of the MFS Quantitative Solutions Team, and portfolio manager for asset allocation products at MFS; and Natalie Shapiro, PhD, quantitative fixed income research analyst and portfolio manager at MFS. They will select the individual securities for the portfolio.

The sub-advisors from UBS will be Neil Williams and Tom Clarke, leading the UBS Global Asset Management team that will use derivatives to manage currency and market risk for the fund.


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