Marketing communication. For Investment Professionals only
M&G (Lux) Optimal Income Fund
A dynamic and flexible approach across the fixed income spectrum
Richard Woolnough, Fund Manager
“This is the most flexible bond strategy I manage. It allows me the freedom to search out the most attractive income streams across a range of fixed income assets in order to optimise performance throughout the economic cycle.”
Fund philosophy
The M&G (Lux) Optimal Income Fund takes its name from the manager’s aim to purchase those assets that provide the most attractive, or ‘optimal’, income stream for the fund. The fund’s unconstrained approach gives Richard Woolnough the possibility to move freely between government bonds, investment grade and high yield corporate bonds. He can also invest in equities when a company’s shares appear more attractive than its debt.
Richard actively manages the fund by combining a top-down macroeconomic approach with rigorous bottom-up credit analysis.
The fund manager’s preferences for duration and credit risk will depend on his outlook for interest rates, economic growth and inflation. The fund’s flexibility enables Richard to position the portfolio exactly in line with his duration and credit views.
Fund's key selling points
- A ‘core’ bond fund that seeks to outperform the major bond sectors in different market conditions.
- Classified as Article 8 fund under EU Sustainable Finance Disclosure Regulation (SFDR), the fund applies an ESG positive tilt and norms-based exclusions (see below).
- The fund promotes environmental/social characteristics and while it does not have as its objective a sustainable investment, it will have a minimum proportion of 20% of sustainable investments.
- Richard Woolnough has the flexibility to invest across the fixed income spectrum, and can even invest a portion of the fund (max. 20%) in equities.
- Richard has more than 30 years of experience in the fixed income market. Over that time his skill and expertise have been widely recognised.
Investment scope*
Portfolio positioning in practice
Duration positions shown in the chart above prior to September 2018 are those of M&G Optimal Income Fund, a UK-authorised OEIC, managed by the same fund manager, applying the same investment strategy as the SICAV. These are shown for illustrative purposes only.
*Norms-based Criteria
| ESG Criteria | Rationale |
|---|---|
| Freedom House | Any government bond from countries classified as "Not Free" by the Freedom House index based on civil liberties and political rights |
| UNGC | Any company that is assessed to be in breach of the United Nations Global Compact Principles on human rights, labour, environment protection and anti-corruption |
Source: M&G 2023
The fund’s Environmental, Social and Governance (ESG) positive tilt is achieved by maintaining a weighted average ESG score above the average ESG score of the benchmark.
Fund Facts
| 31 Jan 2023 | $10.581,46 million |
|---|---|
| Fund launch date | 05 September 2018 |
| Benchmark* | 1/3 Bloomberg Global Agg Corporate Index EUR Hedged; 1/3 Bloomberg Global High Yield Index EUR Hedged; 1/3 Bloomberg Global Treasury Index EUR Hedged |
| Sector | Morningstar EUR Cautious Allocation – Global sector |
| USD A share class | |
|---|---|
| ISIN (Acc) | LU1670724373 |
| ISIN (Dist) | LU1670724456 |
| Initial charge | Max. 4,00% |
| AMC | 1,25% |
| Ongoing charge** | 1,33% |
| SFDR classification | Article 8 |
Source of fund facts: M&G as at 31.01.23.
*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.
**The ongoing charge is based on expenses as at 30.09.22.
This is a marketing communication. Please refer to the prospectus and to the KEY INFORMATION DOCUMENT (KID) before making any final investment decisions.
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 holds a small number of investments, and therefore a fall in the value of a single investment may have a greater impact than if it held a larger number of investments.
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.
ESG information from third-party data providers may be incomplete, inaccurate or unavailable. There is a risk that the investment manager may incorrectly assess a security or issuer, resulting in the incorrect inclusion or exclusion of a security in the portfolio of the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.
Investing in this fund means acquiring units or shares in a fund, and not in a given underlying asset such as a building or shares of a company, as these are only the underlying assets owned by the fund.
The views expressed in this document should not be taken as a recommendation, advice or forecast.
The fund’s sustainability-related disclosures can be found here.
For an explanation of the terms used in this document, please refer to the glossaryon our website here.
For Investment Professionals only. Not for onward distribution. No other persons should rely on any information contained within. This information is not an offer or solicitation of an offer for the purchase of investment shares in one of the funds referred to herein. Purchases of a fund should be based on the current Prospectus. The Instrument of Incorporation, Prospectus, Key Information Document, annual or interim Investment Report and Financial Statements, are available free of charge from M&G Luxembourg S.A., 16, boulevard Royal, L‑2449, Luxembourg. Before subscribing you should read the Prospectus, which includes investment risks relating to these funds. This financial promotion is published by M&G Luxembourg S.A. Registered Office:16, boulevard Royal, L‑2449, Luxembourg.
For Investment Professionals only. Not for onward distribution. No other persons should rely on any information contained within. This information is not an offer or solicitation of an offer for the purchase of investment shares in one of the funds referred to herein. Purchases of a fund should be based on the current Prospectus. The Instrument of Incorporation, Prospectus, Key Information Document, annual or interim Investment Report and Financial Statements, are available free of charge from M&G Luxembourg S.A., 16, boulevard Royal, L‑2449, Luxembourg. Before subscribing you should read the Prospectus, which includes investment risks relating to these funds. This financial promotion is published by M&G Luxembourg S.A. Registered Office: 16, boulevard Royal, L‑2449, Luxembourg.
United States: The Fund has not been registered under the United States Investment Company Act of 1940, as amended, nor the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any US Person) unless the securities are registered under the Act, or an exemption from the registration requirements of the Act is available. In the United States, this material may be distributed only to a person who is a “distributor,” or who is not a “U.S. person,” as defined by Regulation S under the U.S. Securities Act of 1933 (as amended).
Canada: M&G Funds are not registered for distribution in Canada. M&G cannot accept any subscriptions into its Funds from investors resident in Canada.
Chile: ESTA OFERTA PRIVADA SE INICIA EL DÍA 25/05/2023 Y SE ACOGE A LAS DISPOSICIONES DE LA NORMA DE CARÁCTER GENERAL Nº 336 DE LA SUPERINTENDENCIA DE VALORES Y SEGUROS (HOY, COMISIÓN PARA EL MERCADO FINANCIERO); ESTA OFERTA VERSA SOBRE VALORES NO INSCRITOS EN EL REGISTRO DE VALORES O EN EL REGISTRO DE VALORES EXTRANJEROS QUE LLEVA LA COMISIÓN PARA EL MERCADO FINANCIERO, POR LO QUE TALES VALORES NO ESTÁN SUJETOS A LA FISCALIZACIÓN DE ÉSTA; POR TRATAR DE VALORES NO INSCRITOS NO EXISTE LA OBLIGACIÓN POR PARTE DEL EMISOR DE ENTREGAR EN CHILE INFORMACIÓN PÚBLICA RESPECTO DE LOS VALORES SOBRE LOS QUE VERSA ESTA OFERTA; ESTOS VALORES NO PODRÁN SER OBJETO DE OFERTA PÚBLICA MIENTRAS NO SEAN INSCRITOS EN EL REGISTRO DE VALORES CORRESPONDIENTE.
Republic of Colombia: This document does not constitute a public offer in the Republic of Colombia. The offer of the fund is addressed to less than one hundred specifically identified investors. The fund may not be promoted or marketed in Colombia or to Colombian residents, unless such promotion and marketing is made in compliance with Decree 2555 of 2010 and other applicable rules and regulations related to the promotion of foreign funds in Colombia. The distribution of this document and the offering of shares may be restricted in certain jurisdictions. The information contained in this document is for general guidance only, and it is the responsibility of any person or persons in possession of this document and wishing to make application for shares to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Prospective applicants for shares should inform themselves of any applicable legal requirements, exchange control regulations and applicable taxes in the countries of their respective citizenship, residence or domicile.
Mexico: The M&G Funds have not been and will not be registered with the National Registry of Securities, maintained by the Mexican National Banking Commission and, as a result, may not be offered or sold publicly in Mexico. The M&G Fund and any underwriter or purchaser may offer and sell the funds in Mexico, to Institutional and Accredited Investors, on a private placement basis, pursuant to Article 8 of the Mexican Securities Market Law. Please note that each investor into a M&G Fund shall be responsible for calculating and paying its own taxes, receiving any necessary tax advice and that neither the funds nor M&G shall be deemed to have provided tax advice to a potential investor.
Uruguay: The shares must not be offered or sold to the public in Uruguay, except in circumstances which do not constitute a public offering or distribution under Uruguayan laws and regulations. The shares are not and will not be registered with the Financial Services Superintendency of the Central Bank of Uruguay. The shares correspond to investment funds that are not investment funds regulated by Uruguayan law 16,774 dated September 27th 1996, as amended.
Peru: The Shares in this fund have not been registered before the Superintendencia del Mercado de Valores (SMV) and are being placed by means of a private offer. SMV has not reviewed the information provided to the investor. This document is only for the exclusive use of institutional investors in Peru and is not for public distribution.
Brazil: The shares in the fund may not be offered or sold to the public in Brazil. Accordingly, the shares in the fund have not been nor will be registered with the Brazilian Securities Commission – CVM nor have they been submitted to the foregoing agency for approval. Documents relating to the shares in the fund, as well as the information contained therein, may not be supplied to the public in Brazil, as the offering of shares in the fund is not a public offering of securities in Brazil, nor used in connection with any offer for subscription or sale of securities to the public in Brazil.
Argentina: This document includes a private invitation to invest in securities. It is addressed only to you on an individual, exclusive, and confidential basis, and its unauthorised copying, disclosure, or transfer by any means whatsoever is absolutely and strictly forbidden. M&G Luxembourg S.A. will not provide copies of this document, or provide any kind of advice or clarification, or accept any offer or commitment to purchase the securities herein referred to from persons other than the intended recipient. The offer herein contained is not a public offering, and as such it is not and will not be registered with, or authorised by, the applicable enforcement authority. The information contained herein has been compiled by M&G Luxembourg S.A., who assume the sole responsibility for the accuracy of the data herein disclosed.