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Float beyond the ordinary
with M&G (Lux) Global
Floating Rate High Yield Fund

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Designed to generate income with low interest rate risk

Against an uncertain economic backdrop, we believe high yield (HY) floating rate notes (FRNs) offer an appealing combination of features, providing an attractive income stream, while their defensive attributes should leave them well placed to withstand future turbulence in high yield markets.

Very low duration

  • Not meaningfully affected by interest rate risk

Floating rate coupons

  • Coupons are automatically adjusted upwards as interest rates rise

Attractive income

  • Typically high yielding instruments that can target positive real income

Mostly senior secured bonds

  • Greater seniority offers higher priority of claims, leading to a greater recovery rate in the event of default

Most HY FRNs are senior secured, which means they sit at the top of the capital structure, giving investors priority over unsecured creditors in the event of a default.

Why M&G (Lux) Global Floating Rate High Yield Fund

Interest rate volatility has persisted into 2025, driven by heightened political uncertainty, concerns over economic growth, and shifting expectations for monetary policy. In this environment, the fund could provide a valuable hedge against interest rate volatility, allowing investors to lock in an attractive level of yield without sacrificing the potential for attractive returns.

Attractive risk reward profile in a volatile rate environment

  • A high income portfolio with a bottom-up, high conviction approach
  • High single digits portfolio yield with lower volatility (than traditional high yield bonds)

Diversification
 

  • A highly diversified portfolio across sectors and issuers with a focus on Europe
  • A robust complement to US leveraged loans with a stronger liquidity profile

Downside protection with higher seniority

  • Senior secured bond structure provides a strong claim and historically higher recovery rates in the event of default
  • A resilient portfolio that has performed well across economic cycles, with low historic default rates

Find out more about the fund

Scale in Fixed Income and High Yield investing

With over 50 sector-specialist analysts across London, Chicago, and Singapore, our award-winning fund managers work alongside one of the largest and most experienced global credit research teams.

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Fixed Income professionals

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Credit analysts

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Assets under management (AUM)

$ 0 bn

HY strategies AUM

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Strategy launch

Source: M&G Investments, 31 December 2024. In USD terms. Investment professionals include investment teams, central equity analysts, fund managers' assistants and investment specialists.

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Investment involves risk. Past performance is not indicative of future performance. The value and income from the fund's assets can fluctuate and is not guaranteed. Investors may not get back the amount they invested.  Investment returns not denominated in US/HK dollar will expose US/HK dollar-based investors to exchange rate fluctuations. Fund performance will be available after the Fund has attained a 6-month investment track record. Where no past performance is shown there was insufficient data available in that period to provide performance. All periods longer than one year are annualised. M&G (Lux) Investment Funds 1 has appointed M&G Investments (Hong Kong) Limited as the Hong Kong Representative. Please refer to the offering documents for further details including the risk factors.

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