MFS is preparing to launch three offshore funds that will use the bottom-up stockpicking method for ...
MFS is preparing to launch three offshore funds that will use the bottom-up stockpicking method for which the company is well-known in the US.
The three funds will be Global Technology, Global Telecoms and Asian Dynasty, which will focus on Asia including Japan equity investment.
Asian Dynasty and Global Telecoms have been run for some time as Canadian mutual funds, to which MFS was the sub-advisor.
The plan is to clone these portfolios as funds domiciled first in the Cayman Islands and then in Luxembourg.
The Global Tech fund is not a clone, but technology stocks are widely held in the company's existing equity portfolios and the fund will leverage off the research capability of its analysts and portfolio managers.
The new funds will be distributed in the Far East, Middle East and Europe.
The company's investment process is based on fundamental analysis of individual stocks using a bottom-up approach. The focus is on companies which have earnings-per-share growth potential of 20% or more per year and which have a history of high returns on shareholders' equity at a reasonable valuation.
In addition, managers and analysts look for a strong balance sheet, proprietary products or services, a talented and experienced management team and sizable stock holdings by officers and directors.
There is a strong emphasis on company visits, with analysts and managers visiting over 2,500 companies per year.
The company believes earnings growth drives stock prices over time.
Managers aim to buy as early in a company's development as possible and to let winners run, adding to positions on corrections if fundamentals are believed to be solid.
Sell disciplines come into play when a stock approaches the analysts' target sell price, when it becomes apparent a company will not be able to achieve the objectives established at the time of purchase or when a more attractive investment is identified.