Fixed income
M&G (Lux) Global Floating Rate High Yield Fund: Annual review and outlook
15 min read 19 Jan 22
- High yield floating rate notes (HY FRNs) experienced strong investor demand in 2021, as investors sought to protect themselves against expected interest rate rises and inflation.
- The M&G (Lux) Global Floating Rate High Yield Fund delivered a positive return, thanks to our decision to increase exposure to physical FRNs and effective security selection, which saw the fund benefit from positions added at low cash prices in 2020 recovering strongly.
- We believe the outlook for HY FRNs in 2022 is positive, with company profits and interest covering continuing to improve and defaults remaining low.
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