MFS expands Australian offering with contrarian strategy

MFS Investment Management has expanded its equity product offering for Australian wholesale and institutional investors with the launch of the MFS Global Contrarian Equity Trust.

The new trust follows MFS' Contrarian Capital global investment strategy, which seeks to identify divergences between the price and value of large-cap companies experiencing controversy or are in transition.

This includes companies that may be navigating events such as corporate restructuring, special situations, cyclical or structural adjustments, a temporary impairment of the business model or bad news not reflected in the fundamentals.

MFS said the strategy generally selects between 30 and 60 securities that are sector and region agnostic and benchmark unconstrained.

"Each security is screened for value and critically, for change, which is arguably more difficult to measure and requires a dedicated team of global analysts familiar with the businesses and industries involved," MFS said.

"With an investment objective of long-term capital appreciation over a full market cycle, it invests in a diversified portfolio of global equity securities of companies located in developed and emerging market countries."

MFS said the trust was developed in response to demand from Australian investors. MFS based the trust on its Contrarian Value Strategy, which became restricted to new investment in 2023 due to capacity constraints.

The new trust has the same investment philosophy and leaders, co-portfolio managers Anne-Christine Farstad and Zahid Kassam, but offers a larger-cap investment mandate with substantial capacity.

Commenting on the Australian launch, MFS senior managing director and head of Australia and New Zealand Josh Barton said: "The MFS Global Contrarian Equity Trust combines the best of MFS' contrarian investing expertise and risk management with a unique mandate designed to complement and diversify global equities exposures within Australian portfolios."

"At a time when global equity markets are being shaped by forces unprecedented in nature and magnitude, creating more pockets of price dislocations, the trust may provide investors with the value characteristics they seek, while diversifying their equity exposures and providing more flexibility than some of the more dogmatic deep value strategies."