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

7 min read 16 Feb 23

  • The starting point for fixed income investors looks appealing against a backdrop of lower asset prices, with the compensation investors could receive greater compared to this time last year
  • Fund duration remains close to neutral. We continue to see value in government bonds, but we also recognise interest rates must stay higher for longer
  • Because of perceived attractive prices boosted by healthy fundamentals, the fund's exposure to financial bonds has increased - it has risen from 7% to 27% over the past two years
  • Relative fund performance continues to be driven by the direction of the credit markets and tighter valuations between perceived safe government bonds and riskier corporate bonds

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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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