US investment house MFS is preparing for a European campaign as the managing director of its interna...
US investment house MFS is preparing for a European campaign as the managing director of its international arm moves to London and two new European equity funds are launched into its Luxembourg umbrella.
Stephen Coxshall, MFS's assistant director of marketing, said: "Mark Rogers will be relocated to London next month. What it represents is a big commitment from Boston both in terms of sending over senior US personnel, and in terms of giving us direction."
Rogers's primary role will be building up key distribution relationships throughout Europe. MFS is new to the European arena and sales over the 12 months to January this year were up 420%. The two new funds will be the European small cap portfolio, headed up by Barnaby Wiener, and European Strategic Growth, a continental European portfolio run by Marcus Smith.
They will join the European equities fund, a product which is run by MFS's European analysts who vote on their preferred stocks. MFS hopes these three will cover most of the common investment preferences of investors into Europe. The charging structure for these two forthcoming funds is somewhat unusual for Europe and MFS hopes it will attract investors. The 'A' share class is straightforward it trades on NAV and pays a 0.5% trail commission.
In the 'B' class, investors do not pay any initial fee so long as they keep their money in the fund for at least four years. MFS pays the broker 4% of the initial investment out of the company's own coffers.
If the investors redeem within a year, they will lose that 4%, but for every year after, they lose 1% less until they have waited four years and there is no penalty for leaving. MFS pays a trail fee of 0.5%. There is an annual management charge of 1.15%, but there is little room for high levels of profit under such a structure, according to Coxshall.
He said: "Our margins will be low but we will do bigger volumes."
This fee structure is common in the US, according to Coxshall, and demand for it has followed as US companies have started setting up advisory services in Europe.
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