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

4 min read 26 Jun 24

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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