Like our colleagues in M&G’s equity and fixed income teams, the M&G Multi Asset team seek to identify opportunities with the potential to deliver results in our clients’ best interests over meaningful time horizons.* This means our disciplined decision-making process considers all factors that could have an impact on the long-term risk and return profile of our investments, including, as far as possible, the full range of environmental, social and governance (ESG) issues. However, as top-down asset allocators, the extent to which we can analyse specific factors at an individual security level is limited. Most of our views are formed at the macroeconomic (ie asset class and regional) level. We believe derivative instruments are usually best suited to implementing such views, owning to greater efficiency, liquidity and cost efficiency of transactions.
Positions based on asset class and geographic level views will be primarily implemented via equity index futures, ETFs, liquid government bonds futures and physical government bonds, credit default instruments and investment funds. However, a relatively small proportion of our portfolios may be invested in equity or credit sector baskets, where, for example, we see an especially compelling opportunity within a particular sector. We are assisted in the construction of these baskets by M&G’s equity and fixed income teams who apply the same approach to assessing social and environmental and governance issues in selecting securities for our portfolios as they do for their own. Please refer to the relevant sections of this website for details of those processes.
* Investors should be aware that the value of investments, and the income from them, will fluctuate. This will cause the Fund price to fall as well as rise and you may not get back the original amount you invested.