M&G (Lux) Emerging Markets Bond Fund

Objective and investment policy

Objective

The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the global emerging markets bond market over any three-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in bonds issued by the governments, government agencies or companies of emerging market nations*,which can be denominated in any currency.

Other investment: The fund also invests in currencies, focusing mainly on emerging market currencies and major currencies such as the US dollar and euro. It also holds cash or assets that can be turned quickly into cash.

Use of derivatives: The fund typically invests directly, but may also investindirectly via derivatives. Derivatives may also be used to manage risks and reduce costs, as well as to offset the impact of currency exposures arising from the fund’s non-US dollar investments. For more information on the types of bonds held and derivatives used, please referto the Prospectus.

* Emerging market countries are defined as those includedwithin the MSCI Emerging Markets Index and/or those included in the World Bank’s definition of developing economies, as updated from time to time.

Strategy in brief: The investment manager selects investments based on an assessment of global, regional, and country-specific macroeconomic factors,followed by in-depth analysis ofindividual bond issuers. The investment manager is assisted in the selection of individual bonds by the deputy fund manager and an in-house team of analysts. The fund is diversified by investing in a range of bonds from across the global emerging markets.

Performance comparator: The fund is actively managed.Acomposite index comprising 1/3 JPMorgan EM Government Bond Index Global Diversified, 1/3 JPMorgan EM Corporate Bond Index Broad Diversified and 1/3 JPMorgan EM Government Local currency Bond Index Global Diversified is a point of reference against which the performance of the fund may be measured.

These indices represent the emerging market government bond markets denominated in hard currencies, the emerging market corporate bond markets denominated in hard currencies and the emerging market government bond markets denominated in local currencies, respectively.

Glossary terms

Bonds: Loans to governments and companies that pay interest.

Derivatives: Financial contracts whose value is derived from other assets

Risk indicator

Risks associated with the fund

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.

The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.

In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.

The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.

Further details of the risks that apply to the fund can be found in the fund's Prospectus.

Other information

The Fund allows for the extensive use of derivatives.

Performance

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate. Past performance is not a guide to future performance. 

Source: Price: State Street. Performance: Morningstar. Performance figures are on a price to price basis with income reinvested. Performance figures may not reflect all relevant charges.

Please note that the Morningstar Category performance data in this tool where shown, is from the default Morningstar database, which contains all the share classes for each fund available across Europe, Asia and Africa. This can differ from the comparative sector data in M&G factsheets which is from the same database, but showing only the most appropriate share class to represent each fund, and for just those funds available in Europe. Neither Morningstar nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web site, including, but not limited to Information originated by Morningstar, licensed by Morningstar from Information Providers, or gathered by Morningstar from publicly available sources. There may be delays, omissions, or inaccuracies in the Information.

 

Fund Team

Claudia Calich

Claudia Calich - Fund manager

Claudia Calich joined M&G in October 2013 as a specialist in emerging markets debt and is manager of the M&G (Lux) Emerging Markets Bond Fund and the M&G (Lux) Emerging Markets Hard Currency Bond Fund since launch. She is also manager of the M&G Global Government Bond Fund (UK-authorised OEIC) and deputy manager of the M&G (Lux) Global Macro Bond Fund. Claudia has over 20 years of experience in emerging markets, with previous positions at Invesco in New York, Oppenheimer Funds, Fuji Bank, Standard & Poor’s and Reuters. Claudia graduated with a BA (Honours) in Economics from Susquehanna University in 1989 and holds an MA in International Economics from the International University of Japan in Niigata.

 Team member biography
Charles de Quinsona

Charles De Quinsonas - Deputy Manager

Charles de Quinsonas is an emerging market corporate bond specialist and has been deputy fund manager of the M&G Emerging Markets Bond Fund since September 2015. He is also co-fund manager of the M&G (Lux) Emerging Markets Income Opportunities Fund, and has been the deputy fund manager of the M&G (Lux) Emerging Markets Hard Currency Bond Fund since launch in May 2017. Charles has more than 10 years of emerging market corporate bond experience, with a deep knowledge of high yield credit. Prior to joining M&G in 2014, he worked at Spread Research in Lyon and New York, where he spent four years analysing a variety of high yield and emerging market industrial credits. Charles holds a B.B.A. from ESSEC Business School and a MSc in Corporate Finance from iaelyon School of Management.

 Team member biography
Nicolo Carpaneda

Nicolo Carpaneda - Investment specialist

Nicolo Carpaneda joined M&G in 2012 and is investment director in the fixed income team. His role involves explaining the investment philosophy, process and performance of M&G’s retail fixed income fund range, as well as providing updates on overall financial market performance, investment trends and the economic outlook. Prior to joining M&G, Nicolo worked at Citigroup as an associate in the global markets & banking division, focusing on corporate finance and managing a number of multinational clients. He then joined Prudential on the group leadership programme as an internal consultant. Nicolo holds a degree in business administration and Master of Science (Msc) in management from Bocconi University (Italy) and an MBA from IE Business School (Spain). Nicolo is fluent in Italian, English and Spanish.

 Team member biography

Ratings

Rating is at a share class level

4 Star Rating

Ratings as at 31/01/2019. The Morningstar Overall Rating. Copyright © 2019 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2019 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.