Global flexibility and active management in currencies

M&G Global Macro Bond Fund

Fund philosophy 

The M&G Global Macro Bond Fund is a flexible bond fund whose long-term performance is driven by the active management of its duration, credit risk and currency positioning. Fund Manager Jim Leaviss has the freedom to invest in any region in the world and across the full range of global fixed income securities, including government bonds, investment grade corporate bonds, and high yield and emerging market issues.

The fund’s top-down investment approach is based on the fund manager’s macroeconomic views on growth, inflation and interest rates, which is then followed by asset allocation based on a bottom-up approach with assistance from M&G’s extensive team of credit analysts.

Jim Leaviss and his team always look to construct a diversified portfolio with at least four to six uncorrelated themes across bond and currency markets. Recent examples of such themes include:

M&G's global macro bond strategy

We manage £1.6bn across government bonds, investment grade credit, high yield credit & emerging markets as of 31 March 2021 

Watch Jim Leaviss, CIO Public Fixed Income, Eva Sun-Wai, Fund Manager & Andrew Eve, Investment Specialist answering the three big bond questions.

Why the M&G Global Macro Bond Fund?

  • Flexibility A 'go-anywhere' bond with the ability to invest in any type of fixed income security, as we look to take advantage of different market conditions.
  • Currency The fund has the ability to invest in any currency, including from emerging markets, which can be used both for risk taking and for risk hedging.
  • Duration The fund has the ability to go negative duration which provides the potential to reduce the impact on the portfolio should yields rise.
  • Experience Fund Manager Jim Leaviss is CIO of Public Fixed Income at M&G. He has over 20 years of fixed interest experience and is supported by the significant resources at M&G.

The main risks that could affect performance are set out below:

The value and income from 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. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.

Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.

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 the fund.

High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.

In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.

The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.

Operational risks arising from errors in transactions, valuation, accounting, and financial reporting, among other things, may also affect the value of your investments.

Further details of the risks that apply to the fund can be found in the fund's Prospectus.

Where do we see the best opportunities within the asset class today

Laura Frost

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