The M&G Fixed Income team is one of Europe’s largest bond investors, with a strong track record of active management across fixed income assets globally.
Contents
Who are we?
What are bonds?
Fixed income securities, also known as bonds, are loans that are usually taken out by a government or company. They normally pay bondholders a set rate of interest over a given time period, at the end of which the amount borrowed, the principal, is repaid by the bond issuer. The regular interest payments, which are known as coupons, can provide investors with a predictable income stream over the life of the bond, until it matures. The price of a bond can vary over its life, meaning investors can also profit from any increase in its value if they sell before maturity.
What do we do?
Our established team of investment professionals aims to deliver performance over the long term across a range of fixed income products.
We manage a wide range of funds, covering the spectrum of global government and corporate bonds.
How do we deliver?
We seek to identify the best relative and absolute value opportunities by taking advantage of the extensive and diverse experience across both our investment team and our large in-house team of credit analysts.
A focus on long-term performance allows investment teams to exercise conviction, while considering risk management at the same time.
Our range
While each fund differs in terms of its specific investment strategy, they can be grouped into different categories, according to their characteristics.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by a fund.
High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.
The value of 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 and you may get back less than you originally invested.
Building block funds
Funds within the equities, fixed income and property asset classes are what we consider 'building block' funds. Funds within these asset classes should be held as part of a wider investment portfolio. In other terms you should consider creating a ‘diversified portfolio’, where an investment portfolio is spread across a blend of asset classes like equities, bonds and property. As different asset types are likely to perform well at different times and in different market conditions, investing in a good mix means you won't have ‘all your eggs in one basket’ and could mean more consistent returns over the long term too.
To help you easily identify our 'building block' funds you will see the following icon displayed on the fund pages of our building block funds.
Our fixed income funds
Fixed income strategies that can invest across a breadth of different assets, and are designed to perform across different market environments.
Fixed income strategies that invest mainly in investment grade corporate bonds globally, regionally or in specific markets. Investment grade bonds are those issued by companies with higher credit ratings, meaning they are considered to be at lower risk of default on their debts. They potentially incur greater risk but may offer higher returns than government bond funds.
Fixed income strategies that invest mainly in government bonds globally or in specific markets. They potentially incur lower risk but may offer lower returns than corporate bond funds.
Fixed income strategies that invest mainly in high yield bonds globally. High yield bonds are those issued by companies with lower credit ratings, meaning they are considered to be at higher risk of default on their debts. They potentially incur greater risk but may offer higher returns than both government bond funds and investment grade corporate bond funds.
Fixed income strategies that invest mainly in high yield bonds globally. High yield bonds are those issued by companies with lower credit ratings, meaning they are considered to be at higher risk of default on their debts. They potentially incur greater risk but may offer higher returns than both government bond funds and investment grade corporate bond funds.
For more information, please view our M&G Guide to Bonds.
Choosing a fund
Like any investment, you should carefully consider if investing in bonds fits with your personal aims and objectives before investing. Importantly, you should also check that the profile of the funds match your own investment timeframe and appetite for risk and reward. You can find out more about the risks you need to consider before investing in our KIIDs.
Our bond funds are what we call ‘building block’ funds – funds that you should hold only as part of a wider investment portfolio. You should also consider creating what’s called a ‘diversified portfolio’, meaning an investment portfolio that is spread across a blend of asset classes like equities, bonds and property. As different asset types are likely to perform well at different times and in different market conditions, investing in a good mix means you won't have ‘all your eggs in one basket’ and could mean more consistent returns over the long term too.
Find out more about diversification in our handy M&G Guides.