M&G (Lux) Short Dated Corporate Bond Fund

ISIN
LU1670718219

Price (24.06.2019)
10.61

% Price Change
0.05

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 short-dated investment grade corporate bond market over any five-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in investment grade bonds issued by companies from anywhere in the world and asset-backed securities. The fund typically holds bonds which have short repayment dates and, as a result, it has a low portfolio duration. (Duration is a measure of a bond’s/bond fund’s sensitivity to changes in interest rates; a bond fund with low duration is less sensitive to changes in interest rates than funds with longer or higher duration.)

Other investment: The fund also invests in bonds issued by companies with a longer time to repayment, and uses derivatives to reduce their sensitivity to interest rate movements. The fund also holds cash or assets that can be quickly turned into cash.

Use of derivatives: The fund typically invests directly, but may also invest indirectly 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-euro investments.

For more information on the types of bonds held and derivatives used, please refer to the Prospectus.

Strategy in brief: The bonds held in the fund are generally issues due to be repaid within a short period so as to minimise the effect of interest rate movements on the fund’s value. Asset allocation and stock selection are at the heart of the fund’s investment process. The fund manager has the flexibility to spread the portfolio across issuers, sectors and countries, supported by in-depth research by an in-house team of analysts.

Performance comparator: The fund is actively managed. The iBoxx EUR Corporates 1-3 year Index is a point of reference against which the performance of the fund may be measured.

Glossary terms

Asset-backed securities: Bonds backed by assets that produce cashflows, such as mortgage loans, credit card receivables and auto loans.

Bonds: Loans to governments and companies that pay interest.

Derivatives: Financial contracts whose value is derived from other assets.

Investment grade bonds: Bonds with a medium or high credit rating from a recognised credit rating agency are considered to be at lower risk from default than bonds with lower credit ratings.

 

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.

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 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 may lose as much as or more than the amount invested.

The fund is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.

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.

Fund Team

Matthew Russell

Matt Russell - Fund manager

Matthew Russell joined M&G in 2007 and was appointed fund manager of the M&G Short Dated Corporate Bond Fund in September 2013, having served as deputy fund manager since 2011. He was also appointed fund manager of the M&G Gilt & Fixed Interest Fund in July 2015. Matthew joined M&G as a fund managers’ assistant covering the retail fixed interest fund range. He has a BSc in economics from the University of Birmingham and is also a CFA charterholder.

 Team member biography
Ben Lord

Ben Lord - Deputy Manager

Ben Lord joined M&G in 2007 and is the fund manager of the M&G UK Inflation Linked Corporate Bond Fund and deputy fund manager of the M&G (Lux) European Inflation Linked Bond Fund. Ben has also managed the M&G Global Corporate Bond Fund from launch in September 2013 and was appointed fund manager of the M&G Index Linked Bond Fund in July 2015. Ben previously worked at Gordian Knot as a credit analyst covering global financial institutions. He obtained an MA (Hons) from the University of Edinburgh and is a CFA charterholder.

 Team member biography
Ana Gil

Ana Gil - Investment specialist

Ana Gil joined M&G in 2012 as an associate investment specialist covering M&G’s fixed interest fund range. Prior to working at M&G, Ana was initially an analyst at HSBC Private Bank, and then joined HSBC Global Asset Management as part of the institutional sales team. She holds a bachelor's degree in law and finance from Pontificia Comillas University (ICADE) in Madrid and is a CFA charterholder. Ana is fluent in Spanish, English and Italian.

 Team member biography