M&G (Lux) Global Macro Bond 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 bond market over any five year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in bonds, including investment grade bonds, high yield bonds, unrated bonds and asset-backed securities. These bonds may be issued by governments and their agencies, public authorities, quasi-sovereigns, supranational bodies and companies. Issuers of these bonds may be located in any country, including emerging markets*, and denominated in any currency.

Other investments: The fund can also invest in any currency, and cash or assets that can be turned quickly into cash.

Use of derivatives: Derivatives may be used to invest indirectly in bonds. Derivatives may also be used to manage risks and reduce costs, as well as to offset the impact of changes in currency exchange rates on the fund’s investments.

For more information on the types of bonds held and derivatives used, please refer to the Prospectus.

* Emerging market countries are defined as those included within the MSCI Emerging Markets Index and/or those included in the World Bank’s definition of developing economies, as updated from time to time.

Strategy in brief: The fund is a flexible global bond fund. The investment manager selects investments based on an assessment of macroeconomic factors such as economic growth, interest rates and inflation.

This analysis determines which areas of the global bond markets the investment manager believes the fund should invest in to achieve its objective. It also influences the subsequent selection of individual bond holdings, as well as the fund’s currency exposures. The investment manager is assisted in the selection of individual bonds by the deputy manager and an in-house team of analysts.

Performance comparator: The fund is actively managed. The Bloomberg Barclays Global Aggregate Index is a point of reference against which the performance of the fund may be measured.

Glossary terms

Asset-backed securities: Bonds backed by assets that produce cashflows, such as mortgage loans, credit card receivables and auto loans.

Bonds: Loans to governments and companies that pay interest.

Derivatives: Financial contracts whose value is derived from other assets.

High yield bonds: Bonds issued by companies considered to be riskier and therefore generally paying a higher level of interest.

Investment grade bonds: Bonds with a medium or high credit rating from a recognised credit rating agency. They are considered to be at lower risk from default than bonds with lower credit ratings.

Risks associated with the fund

The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective, and you may not get back the amount you originally invested.

Changes in currency exchange rates will affect the value of your investment.

The fund may use derivatives in a limited way to gain exposure to investments exceeding the value of the fund (leverage). This may cause greater changes in the fund’s price and increase the risk of loss.

The fund may use derivatives with the aim of profiting from a rise or a fall in the value of an asset (for example, a company’s bonds). However, if the asset’s value varies in a different manner, the fund may incur a loss.

The fund manager may use derivatives with the aim of producing a capital gain if interest rates rise (normally, if interest rates rise, the capital value of fixed income securities will fall). However, if interest rates fall, the fund may incur a loss.

The value of the fund may fall if the issuer of a fixed income security held is unable to pay income payments or repay its debt (known as a default).

The fund will invest in emerging markets which are generally smaller, more sensitive to economic and political factors, and where investments are less easily bought and sold. In exceptional circumstances, the fund may encounter difficulties when selling or collecting income from these investments, which could cause the fund to incur a loss. In extreme circumstances, it could lead to the temporary suspension of dealing in shares in the fund.

If the share class is hedged (H share class), it aims to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders of the hedged share class from benefiting if the hedged share class currency falls against the US dollar.

Where market conditions make it hard to sell the fund’s investments at a fair price to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s shares.

Some transactions the fund makes, such as placing cash on deposit, require the use of other financial institutions (for example, banks). If one of these institutions defaults on their obligations or becomes insolvent, the fund may incur a loss.

Other information

The fund may invest more than 35% in securities issued by any one or more of the governments listed in the fund prospectus.  Such exposure may be combined with the use of derivatives in pursuit of the fund objective.  It is currently envisaged that the fund’s exposure to such securities may exceed 35% in the governments of Germany, Japan, UK, USA although these may vary subject only to those listed in the prospectus.

The Fund allows for the extensive use of derivatives.

Performance

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate. Past performance is not a guide to future performance. 

Source: Price: State Street. Performance: Morningstar. Performance figures are on a price to price basis with income reinvested. Performance figures may not reflect all relevant charges.

Please note that the Morningstar Category performance data in this tool where shown, is from the default Morningstar database, which contains all the share classes for each fund available across Europe, Asia and Africa. This can differ from the comparative sector data in M&G factsheets which is from the same database, but showing only the most appropriate share class to represent each fund, and for just those funds available in Europe. Neither Morningstar nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web site, including, but not limited to Information originated by Morningstar, licensed by Morningstar from Information Providers, or gathered by Morningstar from publicly available sources. There may be delays, omissions, or inaccuracies in the Information.

 

Fund Team

Jim Leaviss

Jim Leaviss - Fund manager

Jim Leaviss is Head of Retail Fixed Interest for M&G’s mutual fund range. He joined M&G in 1997 after five years at the Bank of England. As well as heading up the team, Jim is co-manager of the M&G (Lux) Absolute Return Bond Fund and also manages the M&G Global Macro Bond Fund and is deputy fund manager of the M&G Global Government Bond Fund.

 Team member biography
Claudia Calich

Claudia Calich - Deputy Manager

Claudia Calich joined M&G in October 2013 as a specialist in emerging markets debt and was appointed fund manager of the M&G (Lux) Emerging Markets Hard Currency Bond Fund at its launch in May 2017. She has been fund manager of the M&G Emerging Markets Bond Fund since December 2013. She was also appointed fund manager of the M&G Global Government Bond Fund and deputy manager of the M&G Global Macro Bond Fund in July 2015. Claudia has over 20 years of experience in emerging markets, most recently as a senior portfolio manager at Invesco in New York, with previous positions at Oppenheimer Funds, Fuji Bank, Standard & Poor’s and Reuters. Claudia graduated with a BA honours in economics from Susquehanna University in 1989 and holds an MA in international economics from the International University of Japan in Niigata.

 Team member biography
Laura Frost

Laura Frost - Investment specialist

Laura Frost is an investment specialist providing support for the M&G retail fixed income fund range. Laura joined M&G in 2011 as a technical training director for the Learning Matters team. Prior to M&G, Laura worked for six years at a training consultancy specialising in capital markets, focusing on fixed income and derivatives. Before this, she spent six years as a fixed income derivatives trader for a proprietary trading house. Laura graduated from Leeds University in 1998 with a BSc (Hons) in geology, and in 1999, gained an MSc in engineering geology.

 Team member biography

Ratings

Rating is at a share class level

5 Star Rating

Ratings as at 31/01/2019. 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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For Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals. The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.