Optimal Income
Optimal Outcomes

M&G (Lux) Optimal Income Fund


Optimising the flexibility

After a decade of zero or negative interest rates in developed markets, inflation has jumped and central banks have had to reverse course and hike interest rates aggressively. As a result, government and corporate bond yields have risen dramatically, and bond prices have fallen with a similar velocity.

Against this macro backdrop, investors can find attractive and diversified risk-adjusted returns within a wide range of government and corporate bonds, across investment grade and high yield, and from developed countries to emerging markets.

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.

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Optimal Possibilities

A global, flexible bond fund with an attractive income that invests in the three main fixed income asset classes: government bonds, investment grade and high yield.


Dynamic allocation across government, investment grade and high yield
Seek optimal mix of duration and credit allocation in any environment


Diversified across sectors and issuers
Over 250 distinct issuers in 25 countries and 18 sectors

Active yet simple

Actively managed, combining macroeconomic views and bottom-up security selection
Hedged back to base currency to mitigate foreign exchange risk


Consistent long-term performance
First or second quartile rankings across all time periods
Managed by experienced investment professionals

Optimal Outcomes

Through a consistent and active investment process, the fund has delivered positive returns and outperformed the composite benchmark over different time periods.

Past performance is not a guide to future performance.

Source: M&G Investments as at 31 October 2023. The M&G (Lux) Optimal Income Fund is a highly flexible bond fund that can invest across government, corporate and high yield bond sectors. Each sector has a different level of investment risk, including duration and credit risk, and the fund is subject to these risks given its flexible investment strategy. The benchmark is a comparator used solely to measure the fund’s performance and reflects the scope of the fund’s investment policy but does not constrain portfolio construction. The fund is actively managed. The fund’s holdings may deviate significantly from the benchmark’s constituents. The benchmark is not an ESG benchmark and is not consistent with the ESG Criteria. Source: Morningstar Inc., Morningstar Wider Universe, 31 October 2023, US dollar A-H class shares, income reinvested, price-to-price. US dollar A-H class shares, performance prior to 5 September 2018 is that of the USD A-H share class of the M&G Optimal Income Fund (which launched on 1 October 2010), and which merged into this fund on 8 March 2019. Tax rates and charges may differ. *1/3 Bloomberg Global Agg Corporate Index EUR Hedged; 1/3 Bloomberg Global High Yield Index EUR Hedged; and 1/3 Bloomberg Global Treasury Index EUR Hedged. The composite index was introduced as the fund’s benchmark on 7 September 2018. 

More Information

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.

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.

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.

The fund is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.

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.

Investing in this fund means acquiring units or shares in a fund, and not in a given underlying asset such as building or shares of a company, as these are only the underlying assets owned by the fund.

Wherever a reference or indication of past performance is shown, please note,  past performance is not a guide to future performance.

The views expressed in this document should not be taken as a recommendation, advice or forecast.

Further risk factors that apply to the fund can be found in the fund’s Prospectus.

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