Marketing communication. For Investment Professionals only

M&G (Lux) Emerging Markets Bond Fund

A flexible fixed income approach to emerging markets
Claudia Calich, Fund Manager

“The flexibility of this fund allows me to construct a ‘best-ideas’ portfolio with the freedom to invest in any emerging market debt security as well as in any emerging market currency.”

Why invest in emerging market debt?

  • Potential for attractive yields Emerging market bond yields are among the highest available in the fixed income asset class, supporting the risk/reward appeal of these assets.
  • A diverse asset class The emerging market hard and local currency government and corporate debt markets provide huge diversity among global bonds.
  • An expanding opportunity set Emerging market corporate bonds have been a particularly fast-growing segment of the fixed income universe over the past decade.

Fund philosophy

  • The M&G (Lux) Emerging Markets Bond Fund is able to invest across all fixed income emerging markets in hard or local currency, in both government and corporate bonds. At least 80% of the fund is invested in these bonds, which can be denominated in any currency and be of any credit quality.
  • A flexible approach that combines top-down analysis of macroeconomics with bottom-up security selection to construct a ‘best-ideas’ portfolio as the fund manager seeks to generate performance in different market conditions.
  • The fund manager actively manages the following three levers to help drive the fund’s performance: duration, credit risk, and currency exposure.
A flexible fund, unconstrained by its benchmark

Source: M&G, 2021.

Fund's key selling points

  • A highly flexible bond fund unconstrained by its benchmark.
  • The fund’s flexibility allows the portfolio to be managed with broad diversification by country, currency and credit rating.
  • Fund manager with over 20 years of experience in emerging markets.

Fund Facts

28 February 2022 US$3,118.94 million
Fund launch date 17 September 2018
Benchmark* 1/3 JPM EMBI Global Diversified Index;
1/3 JPM CEMBI Broad Diversified Index;
1/3 JPM GBI-EM Global Diversified Index
Sector Morningstar Global Emerging Markets Bond sector
USD A share class
ISIN (Acc) LU1670632337
Initial charge Max. 4,00%
AMC 1,25%
Ongoing charge** 1,44%

Source of fund facts: M&G as at 28.02.22.

*The benchmark is a comparator against which the fund’s performance can be measured. The composite index has been chosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark does not constrain the fund's portfolio construction. The fund is actively managed. The investment manager has freedom in choosing which assets to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.

**The ongoing charge is based on expenses as at 30.09.21.

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.

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.

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.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

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.

Further details of the risks that apply to the fund can be found in the fund’s Key Investor Information Document and 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.