M&G (Lux) Emerging Markets Corporate ESG 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 corporate emerging markets bond over any three-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in debt securities issued by companies, including those backed or owned by governments, in emerging markets. These securities are denominated in the currencies of developed countries such as the US dollar, euro, yen and sterling.

No credit quality restriction applies, and the fund may invest up to 100% in lower quality debt securities.

The fund invests in securities that meet the investment manager’s environmental, social and governance (ESG) criteria. Companies deemed to be in breach of the United Nations Global Compact principles and/or involved in defence and weapons are excluded. Investments in companies involved in industries such as tobacco and nuclear power are restricted.

Other investments: The fund may invest in debt securities issued by emerging market governments and government-related institutions denominated in any currency, Chinese bonds denominated in Renminbi, asset-backed securities and contingent convertible debt securities.

The fund may also invest in other funds, cash or assets that can be turned into cash quickly.

Derivatives: The fund may invest via derivatives and use derivatives to reduce the risks and costs of managing the fund.

Strategy in brief: The investment strategy is based on an in-depth analysis of corporate bonds, as well as an evaluation of the risks associated with the respective governments. ESG criteria are assessed as part of the credit analysis of bond issuers, and act as an additional filter to the fund’s exclusion policies.

Performance comparator: The fund is actively managed. The JPM CEMBI Broad 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.

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 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.

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.

Fund Team

Charles de Quinsona

Charles De Quinsonas - Fund 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
Claudia Calich

Claudia Calich - Deputy 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



The value of investments, and the income from them, will fluctuate. This will cause fund prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed on this web page should not be taken as a recommendation, advice or forecast.