Investment update and outlook - M&G (Lux) Optimal Income Fund

9 min read 29 Apr 22

It has been a volatile few months for markets and the majority of fixed income asset classes have produced a negative return.

Based on our macro view and where valuations are, we believe the fund can benefit from tighter credit spreads and rising government bond yields in coming periods.

Year-to-date, the fund has generated a negative return driven by wider spreads and higher government bond yields. However, the fund outperformed its benchmark mainly thanks to its more cautious duration positioning.

Duration ended the quarter at around 3.8 years, the highest it has been for a while. It was lengthened at the short-dated end of the yield curve, while we are still underweight at the long-end.

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By Richard Woolnough

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

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