Volatility

MFS launches two low-volatility equity funds

MFS has launched two low-volatility mutual funds, MFS Low Volatility Equity Fund (MLVAX) and MFS Low Volatility Global Equity Fund (MVGAX).

The funds are intended to meet the increased demand for investment solutions that provide exposure to equity markets with less overall volatility.
 
"Despite the substantial gains in stock markets since the Great Recession ended, investors have been reluctant to invest in equities because of market volatility, hindering their ability to meet their long-term investing goals," says Jim Jessee, president of MFS Fund Distributors. "In general, low-volatility equity funds seek to provide a less volatile return stream to investors than the overall stock markets."
 
MFS Low Volatility Equity Fund and MFS Low Volatility Global Equity Fund seek capital appreciation with reduced volatility relative to their respective benchmarks indices, the Standard & Poor's 500 Index and the MSCI All Country World Index over a full market cycle. Each fund will invest in stocks that are attractive from both a fundamental and quantitative perspective, leveraging MFS' global research platform of more than 200 investment professionals.
 
Each fund seeks to achieve lower levels of volatility than its benchmark through individual stock selection, the elimination of many of the most volatile stocks in their investment universes, and by using a disciplined portfolio construction process.
 
"Our approach to low-volatility investing is both disciplined and unique. The portfolio managers are screening out about one-third of the most volatile stocks and then looking for companies that are favoured by both our quantitative and fundamental research analysts," says Jessee. "The portfolio construction is disciplined and repeatable and relies on individual stock selection – concepts that resonate with financial advisors and their clients."
 
The funds are managed by members of the MFS quantitative solutions team. James Fallon and Matthew Krummell manage MFS Low Volatility Equity Fund. Fallon joined MFS in 1999 and became an equity quantitative analyst in 2001. He has been managing domestic and international quantitative portfolios since 2007. Krummell joined MFS in 2001 as a quantitative equity research analyst and has managed client portfolios since then.
 
Fallon is joined by Jonathan Sage on MFS Low Volatility Global Equity Fund. Sage joined MFS in 2000 as a quantitative equity research analyst and was named a portfolio manager in 2005.
 
The funds are available for purchase in multiple share classes (A, B, C, I, R1–R5) through financial advisors, financial planners, broker/dealers and other financial intermediaries and retirement platforms.

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