The M&G (Lux) Conservative Allocation Fund is to be merged into the M&G (Lux) Sustainable Allocation Fund
The M&G (Lux) Sustainable Allocation Fund is the firm’s flagship multi asset offering for sustainability and impact investing
27 July 2022 – M&G today announces its intention to merge the M&G (Lux) Conservative Allocation Fund (“the Merging Fund”) into the M&G (Lux) Sustainable Allocation Fund (“the Receiving Fund”). Both strategies follow a flexible approach to asset allocation but, as an SFDR Article 9 strategy, the Receiving Fund also seeks to have a positive societal impact through addressing the world’s major social and environmental challenges.
In recent years, investors have demonstrated an increasing interest in sustainability and attention towards how their capital is deployed in financial markets. Launched in 2018, the M&G (Lux) Sustainable Allocation Fund managed by Maria Municchi, seeks to provide a total return (capital growth plus income) of 4-8% per year over any five-year period; and to contribute to a sustainable economy by investing in assets supporting environmental and/or social goals, in particular climate change mitigation.
The merger is in part due to both the reduced investor sentiment towards the Merging Fund and the backdrop in fixed income markets over the last few years, which made it challenging for it to consistently achieve its yield targets within its volatility parameters. The Receiving Fund typically holds a higher proportion of equities and lower proportion of fixed income securities than the Merging Fund, and M&G is taking action because the Receiving Fund provides investors with better potential for long-term returns without significantly increasing volatility.
Fabiana Fedeli, Chief Investment Officer, Equities and Multi Asset at M&G, says: “We believe that companies whose products and operations are managed sustainably will experience better operating performance and/or stronger growth over the long term. This merged strategy will leverage the team’s solid experience in sustainability and impact investing to provide positive environmental and societal outcomes, alongside aiming to achieve attractive long-term returns for our investors.”
Ahead of the merger, effective on Friday 21 October 2022, there will be a realignment of the M&G (Lux) Conservative Allocation Fund.