MFS adds to Luxembourg portfolio
Boston funds group MFS has launched a high yield and high grade corporate bond fund for the nascent European corporate fixed income market, as part of rebranding its Luxembourg funds.
Jeremy Beswick of MFS in London says: We believe the rate of growth is going to be great and that there will be a rapid growth of a high yield bond market. The single currency will revolutionise the corporate finance environment in Euroland, as companies will borrow in the markets rather than from their banks." He sees this market being driven byinvestment bankers on one side and mutual fund investors on the other.
Both fund s will be denominated in euros, as will a pan-European equity fund, also being launched this month. The funds will be able to invest across Europe, including emerging Europe. "In the early stages, the bond funds will be able to invest in issues on other exchanges outside Europe, provided the issuers primary business is in Europe."
MFS has run high grade and high yield corporate bond funds in the US since the 1970s. "We want to bring that experience to bear on this fledgling market in Europe." It is developing research capacity in Europe for this (see page 8).
It has also launched a euro-denominated version of Global Equities Fund and a dollar-based clone of the dom-estic US Strategic Growth Fund which will focus on large US growth stocks."