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MFS majors on Meridian

MFS International UK, part of Boston-based MFS Investment Management, has merged its UK, Cayman Islands and Luxemburg fund ranges to create a new Ucits III compliant Sicav range for UK investors, MFS Meridian Funds.

MFS entered the UK market with three equity funds in 2001, but bond funds were then in demand and MFS did not have an offering in that asset class. As a result of the merger, UK investors will now have access to 28 MFS funds denominated in sterling, euros and dollars As well as making a range of bond funds available, MFS is also providing access to the MFS technology fund.

This fund aims for growth by investing globally in technology companies across the market capitalisation spectrum, including early stage companies with the potential to become big. It will focus on companies which have above average growth potential and which MFS believes will benefit from progress in the technology sector. To identify these companies, MFS will combine published will use published information sources with its own bottom-up research.

Although the fund invests globally, the US dominates the portfolio with top 10 holdings such as Cisco Systems, Dell and Symantec. Holdings from other regions include Samsung and Nokia.

This fund was established in its original form during the technology boom of 2000 and investors who are prepared to revisit the sector through this fund will get the benefit of a track record as opposed to a completely new fund. While this unfashionable sector may now look attractive in terms of valuation and the need for companies to upgrade their computer software systems may create good investment opportunities, risk may still be the overriding concern among investors,

Technology companies can be risky because the pace of development is so fast that innovative products can soon become obsolete and may never take off commercially in the first place. These factors make technology a volatile area of investment but some investors may feel it is worth investing a small part of their portfolio in this area.

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