Marketing communication. For Investment Professionals only
“We believe that a genuinely unconstrained multi-asset portfolio is the most efficient way to generate consistent investment returns across the market cycle.”
The M&G Multi Asset team believes that ﬁnancial markets often move irrationally because investors allow their emotions to aﬀect their decision-making. Using a robust valuation framework, they examine the economic environment to ﬁnd occasions – ‘episodes’ – where investor behaviour has moved asset prices away from their long-term fair value.
The fund has a highly flexible investment approach with the freedom to invest in different types of assets issued anywhere in the world and denominated in any currency. The fund will typically use derivatives to gain exposure to these assets. As well as the ability to take long and short positions, the fund managers can go negative duration. Asset allocation is expected to be the main driver of returns over time.
The fund aims to deliver a positive total return (the combination of income and capital growth) of 5-10% on average per year over any three-year period by investing globally in a range of assets, including equities, ﬁxed income and currencies. The fund managers expect the fund to have an annualised volatility of between 5% and 12%.
The fund will normally invest within the following net allocation ranges, which reﬂect the sum total of long and short positions.
|Net allocation range||Neutrality|
|Currency||Min. 30% in EUR, Min. 60% in EUR, GBP and USD combined|
*Excluding cash and cash equivalents.
**Mainly real estate-related securities, convertibles and infrastructure assets.
Neutrality is the positioning of the fund if all assets were trading at their ‘fair value’. This can be thought of as a strategic asset allocation. In an ideal world, when all assets were trading at their ‘fair value’, then neutrality would be how a fund was positioned, given its strategy and risk proﬁle. However, assets seldom trade at fair value, so the actual allocation of the fund may not match the neutral position.
The fund managers evaluate the macroeconomic environment and look for instances where investor emotion has moved asset classes away from what the managers assess to be their long-term ‘fair value’ or ‘neutrality’.
Source: Reﬁnitiv Datastream, 9 Feburary 2022, for illustrative purposes only. The green columns show the expected return or real yield from each type of asset. The neutrality band is the level where the fund managers perceive the real yield to be a ‘fair’ reﬂection of the assets’ underlying value. *Real yield for equity is deﬁned as an inverted p/e ratio, using forward consensus data. The above data is a hypothetical representation for illustrative purposes only and is not representative of any M&G product or strategy. No representation is being made that any account, product, or strategy will or is likely to achieve proﬁts, losses, or results similar to those shown. This chart represents just the starting point for the team’s investment process and behavioural ﬁnance insights are crucial to its interpretation. M&G does not have house views.
|28 February 2022||US$2,717.37 million|
|Fund launch date||16 January 2018|
|Sector||Morningstar USD Flexible Allocation sector|
*The fund is actively managed and has no benchmark. Investors can assess the performance of the fund by its objective to provide a combination of capital growth and income of 5-10% on average per year over any three-year period.
This is a marketing communication. Please refer to the prospectus and to the KIID before making any final investment decision.
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 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.
The fund is exposed to diﬀerent currencies. Derivatives are used to minimise, but may not always eliminate, the impact of currency movements in currency exchange rates.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The fund allows for the extensive use of derivatives.
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.
For Accredited Investors and Institutional Investors only. Not for onward distribution. No other persons should rely on any information contained within.
This document is issued by M&G Investments (Singapore) Pte. Ltd. (Co. Reg. No. 201131425R), regulated by the Monetary Authority of Singapore. For “accredited investors” and “institutional investors” as defined under the Securities and Futures Act (Cap. 289) of Singapore (“SFA”) only. This document forms part of, and should be read in conjunction with, the Information Memorandum of the Fund and other communications permitted for offers made in reliance of prospectus exemptions under the SFA. All forms of investments carry risks. Such investments may not be suitable for everyone.