Insights and market news

The M&G (Lux) Emerging Markets Hard Currency Bond Fund (EMHC) seeks to capture the best value in the EM government and quasi-sovereign hard currency bond sub-asset classes.

The M&G (Lux) Global High Yield ESG Bond Fund combines M&G’s long-running expertise in high yield investing with a rigorous assessment of environmental, social and governance (ESG) factors.

We believe the global economic recovery remains on track. Leading indicators suggest that a healthy labour market should drive wage growth. After strong performance from a number of the areas where we found value in 2017, we are gradually re-orienting the portfolio towards market segments that we believe offer better value now: high-quality US investment grade credit, short-dated US Treasuries and - at the margin - equities.

Our current trajectory of greenhouse gas emissions looks set to cause irreparable damage to the planet, altering the nature of our existence forever. A less extreme outcome is possible, but will require the widescale adoption of renewables. As such, the market share of renewable energy sources – in particular, wind and solar – is expected to grow at an exponential rate.

Bond investors frequently use the experience of US bond markets in 1994 as an example of the impact that duration can have in times of sharply rising yields. In 1994, an improving economy encouraged the US Federal Reserve to increase interest rates multiple times, leading to what became known as the ‘great bond massacre’.

Since 28 April 2015, the M&G North American Dividend Fund has pursued a dividend growth strategy, in the strong belief that this approach provides a tailwind to outperform the US market. As part of this investment philosophy, we have been picking stocks with a disciplined process driven by fundamental analysis and backing our conviction in our best ideas.