M&G (Lux) Emerging Markets Hard Currency Bond Fund

Objective and investment policy

Objective

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

Investment policy and strategy

Core investment: At least 80% of the Fund is invested, typcially directly, in bonds issued by emerging market governments and government-related institutions, which are denominated in the currencies of developed countries such as the US dollar, euro, yen and sterling.

Other investment: The fund may invest in bonds issued by emerging market companies or bonds issued in emerging market currencies, including Chinese bonds denominated in Renminbi. The fund may also invest in other funds and cash or assets that can be turned into cash quickly.

Derivatives: The fund may invest via derivatives and use derivatives with the aim of reducing the risks and costs of managing the fund.

Strategy in brief: The fund has a flexible investment approach which begins with an analysis of the global economy. Within this framework, the investment manager’s approach involves forming a view on the economic outlook, identifying countries with solid fundamentals and evaluating the quality of individual bonds. This disciplined, multi-pronged approach provides the basis for the fund’s asset allocation, country and currency weighting, as well as selection of bonds.

Performance comparator: The fund is actively managed. The JPM EMBI Global Diversified Index is a point of reference against which the performance of the fund may be measured.

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 invest in China A shares. Investments in assets from the People's Republic of China are subject to changeable political, regulatory and economic conditions, which may cause difficulties when selling or collecting income from these investments. In addition, such investment is made via the 'Stock Connects' systems, which may be more susceptible to clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.

Investing in bonds from China, denominated in Renminbi and traded on the China Interbank Bond Market, may be subject to greater clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.

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

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 and of the M&G (Lux) Emerging Markets Corporate ESG 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 was appointed fund manager of the M&G (Lux) Emerging Markets Corporate ESG Bond Fund upon launch in July 2019. Charles joined M&G's Fixed Interest team in May 2014 as an emerging market corporate bond specialist, and is co-fund manager of the M&G (Lux) Emerging Markets Income Opportunities Fund, as well as deputy manager of the M&G (Lux) Emerging Markets Bond Fund and the M&G (Lux) Emerging Markets Hard Currency Bond Fund. He has more than 10 years of emerging market corporate bond experience, with a deep knowledge of high yield credit. Prior to joining M&G, Charles worked at Spread Research in Lyon and New York, where he spent four years analysing a variety of high yield and emerging markets industrial credits. Charles holds a BBA from ESSEC Business School, a MSc in Corporate Finance from iaelyon School of Management and a BA (Hons) in Business & Finance from Sheffield Hallam University.

 Team member biography

For Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals. 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.