M&G (Lux) Global Convertibles Fund

Objective and investment policy

Objective

The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the global convertibles market over any five-year period.

Investment policy and strategy

Core investment: At least 70% of the fund is invested in convertibles issued by companies from anywhere in the world, including emerging markets. The fund also holds company shares in combination with bonds to replicate the exposure to convertibles when a direct holding is not available. Company shares are also held to adjust the technical characteristics of individual convertibles, such as making them more sensitive to changes in the price of the shares into which they convert.

Other investments: The fund may invest in other funds, contingent convertible debt securities and cash or assets that can be turned into cash quickly.

Derivatives: The fund may invest via derivatives and use derivatives to reduce the risks and costs of managing the fund.

Strategy in brief: The fund employs a disciplined approach to select each convertible. The strategy is based on the analysis of individual companies, and the characteristics of the bonds and shares of these companies.

The fund manager seeks to identify convertibles that, in their opinion, provide the best risk-return profile. For these convertibles, the fund manager expects that the potential gain from the option on the underlying share price exceeds the potential loss from the share price falling.

Benchmark: Refinitiv Global Focus Convertible Bond Index

The benchmark is a comparator against which the fund’s performance can be measured. The index has been chosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark is used solely to measure the fund’s performance and does not constrain the fund's portfolio construction.

The fund is actively managed. The investment manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.

For unhedged and currency hedged share classes, the benchmark is shown in the share class currency.

You can find more information about the objective and investment policy of the fund in the Prospectus.

Risks associated with the fund

The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

Convertibles are subject to the risks associated with both bonds and company shares, and to risks specific to the asset class. Their value may change significantly depending on economic and interest rate conditions, the creditworthiness of the issuer and the performance of the underlying company shares. In addition, issuers of convertibles may fail to meet payment obligations and their credit ratings may be downgraded. Convertibles may also be harder to sell than the underlying company shares.

The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset's value vary in an unexpected way, the fund may lose as much as or more than the amount invested.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.

In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.

The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.

Further details of the risks that apply to the fund can be found in the fund's Prospectus.

Other information

The Fund allows for the extensive use of derivatives

The performance webpage for this fund is currently being reconfigured. In the interim, for performance information, please refer to the latest Fund Factsheet which can be found in the Literature section.

Fund Team

Leonard Vinville

Leonard Vinville - Fund manager

Léonard Vinville joined M&G in 2002, and since then has been managing the convertibles allocation of the Prudential With Profit Life Fund. He has also been responsible for managing the M&G (Lux) Global Convertibles Fund and M&G Global Convertibles Fund (UK-authorised OEIC) since launch. The funds are run with the same investment approach and with an emphasis on generating strong risk-adjusted returns. Prior to joining M&G, Léonard was head of European convertibles at AGF Asset Management in Paris, where he managed convertibles and French equity mandates. He has an MBA and is qualified as a chartered accountant.

 Team member biography
David Romani

David Romani - Deputy Manager

David Romani was appointed deputy manager of the M&G Global Convertibles Fund in October 2013. David joined M&G in 2005, performing a variety of roles in strategic planning, marketing and client communications before becoming a dedicated convertibles analyst in the Global Convertibles team. Prior to joining M&G, he worked for Prudential and as a consultant to the asset management and life insurance industries. David holds an MBA degree from the University of Chicago and is a CFA charterholder.

 Team member biography
Yannis Karachalios

Yannis Karachalios - Deputy Manager

Yannis Karachalios was appointed deputy manager of the M&G Global Convertibles Fund in October 2013, having joined M&G in 2011 as a credit analyst dedicated to the convertible bonds team. He is responsible for the credit analysis of convertible bonds and he has eight years of experience in high yield, leveraged loans and distressed debt. Yannis previously worked at Alpstar Capital in Geneva. Prior to this, he was a high yield credit analyst at Hermes Fund Managers London. Yannis has an MSc in financial economics from Brunel University.

 Team member biography
Susanne Grabinger

Susanne Grabinger - Investment specialist

Susanne Grabinger joined M&G in 2010 and is currently an investment specialist providing support for M&G's multi-asset fund range and the M&G Global Convertibles Fund. Prior to joining M&G, Susanne worked at JPMorgan Asset Management as a client portfolio manager, focusing on institutional equity accounts and balanced mutual funds. She holds a master’s degree in business administration from the University of Bamberg, Germany, and is a CFA charterholder. Susanne is fluent in German and English and is also proficient in French and Spanish.

 Team member biography

Ratings

Rating is at a share class level

3 Star Rating

Ratings as at 28/02/2020. The Morningstar Overall Rating. Copyright © 2019 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2019 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.

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