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Fixed income

M&G (Lux) Global Floating Rate High Yield Fund - The meaning of higher rates for (slightly) longer

4 min read 26 Jun 24

By M&G Fixed Income team

For professional investors only.

  • In an environment characterised by directionless yields and ongoing credit spread tightening, global high yield floating rate notes (FRNs) have continued to deliver solid returns so far in 2024.
  • There is a renewed expectation in financial markets that interest rates may remain somewhat higher for longer, with economic activity re-accelerating and disinflation slowing. This combination of factors is likely to be conducive for short dated strategies, in our view.
  • From a portfolio perspective, we believe that as spreads continue to tighten, selectivity is crucial. We remain focused on resilient businesses, with low cost structures and manageable refinancings, and avoid more stressed sectors.

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By M&G Fixed Income team

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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The value of 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 and you may get back less than you originally invested.

This website is for Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. The information and materials found on this website are for informational purposes only and this website is not a solicitation to buy nor an offer to sell securities or an offering of securities to any person in any state or other jurisdiction in the United States. Shares in M&G Funds have not been and will not be registered under the United States Securities Act of 1933, as amended, or registered or qualified under the securities laws of any state of the United States and may not be offered, sold, transferred or delivered, directly or indirectly, to any investors within the United States or to, or for the account of, US Persons, except in certain limited circumstances pursuant to a transaction exempt from such registration or qualification requirements. The Funds will not be registered under the United States Investment Company Act of 1940, as amended. Any offer to sell or purchase of any interest in an M&G Fund must be made pursuant to local laws of the relevant jurisdiction in which such interests are offered. M&G Funds are not registered for distribution in Canada. M&G cannot accept any subscriptions into its Funds from investors resident in Canada.