Findex seeds Aussie/NZ trust for MFS with A$130m


MFS Investment Management has launched an Australian-domiciled trust for the wholesale (planners) and institutional markets called the ‘Global Opportunistic Fixed Income Trust’. The new fund came about because of requests from its first big client, Findex, for such an offering.

The trust, which mirrors a strategy available to only certain investors in Australia previously, is designed to “generate returns from diverse sources of alpha in a variety of market conditions”, MFS, which has a strong Australian presence, says.

“The trust takes an integrated research approach, striving to identify inefficiencies in global fixed income markets. It seeks out a broad range of opportunities to add value, including those involving global sector allocation, security selection, duration and currency management over a full market cycle, MFS says.

“The trust focuses on issuers located in developed markets but may also invest in the emerging markets. It invests in corporate and government issuers and mortgage-backed and other asset-backed securities, as well as investment-grade and below-investment-grade debt instruments. Through this global opportunity set, the fund aims to allocate risk where it is most attractively priced in order to generate returns.”
The trust launch, mentioned by Marian Poirier, MFS senior managing director of Australia and New Zealand, at a gathering in Sydney last week, follows the prompting from Findex for an Australian-domiciled vehicle. Findex is a leading provider of integrated financial advisory and accounting services. Findex is the initial investor in the trust through a $130 million commitment.

While the portfolio has the ability to allocate to various sectors, including riskier segments of the fixed income markets, the trust uses a benchmark-aware approach that seeks to balance higher yield and total return potential while still providing the diversification benefits traditionally offered by fixed income.

Ross Cartwright, an MFS managing director and head of retail, said: “With Australian interest rates at a record low, using a global approach to seek additional sources of income and improved risk/reward in fixed income is becoming more important. In our view, alpha will play a larger role in overall total returns going forward. Having a manager who can use a global opportunity set to allocate across the asset class enhances efforts to generate performance.”

Pilar Gomez-Bravo and Robert Spector are the trust’s lead managers, responsible for asset allocation and risk budgeting in the portfolio. Pilar is director of fixed income for Europe. She has previously been a head of research and a hedge fund manager at other organisations.

Pilar and Robert Spector work with a group of sector-level portfolio managers who, in addition to providing insights on relative value for their sectors, are also responsible for buy and sell recommendations therein. Owen Murfin is the institutional portfolio manager overseeing the trust.

– G.B.