Optimal Income Fund

ISIN
GB00B1VMCY93

Price (10.12.2018)
19.33

% Price Change
0.09

Past performance is not a guide to future performance

Objective and investment policy

Objective

The fund aims to provide income and capital growth.

Investment policy and strategy

Core investment: The fund is a flexible fund, where at least 50% will be invested in bonds. The fund manager has the freedom to invest across a broad range of bonds (government bonds, investment grade corporate bonds, and high yield bonds), wherever the greatest opportunities can be found. These bonds can be denominated in any currency. Typically, the fund invests in bonds issued by governments or companies in developed markets, although it can also invest in bonds from emerging markets. The fund holds these assets directly and indirectly through derivatives.  

Other investments: The fund may invest a portion (up to 20%) in company shares when the fund manager believes that a company’s shares offer a better return than its bonds. The fund may also hold money market instruments (for example, debt due to be repaid within a year) and cash. 

Use of derivatives: Derivatives may be used to gain exposure to the fund’s core and other investments, to reduce risks and costs and to manage the impact of changes in currency exchange rates on the fund’s investments.

Derivatives may also be used to generate market leverage (in other words, gain exposure to investment exceeding the value of the fund). 

Strategy in brief: The fund manager selects investments based on an assessment of a combination of macroeconomic, asset, sector and stock-level factors. Spreading investments across issuers and industries is an essential element of the fund’s strategy and the manager is assisted in the selection of individual bonds by an in-house team of analysts. 

Glossary terms 

Bonds: Loans to governments and companies that pay interest. 

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

High yield Bonds: Bonds issued by companies considered to be riskier and therefore generally paying a higher level of interest. 

Investment grade corporate Bonds: Bonds issued by a company with a medium or high credit rating from a recognised credit rating agency. They are considered to be at lower risk from default than those issued by companies with lower credit ratings.

Risks associated with the fund

The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective, and you may not get back the amount you originally invested.

When interest rates rise, the value of the fund is likely to fall.

The value of the fund may fall if the issuer of a fixed income security held is unable to pay income payments or repay its debt (known as a default).

The fund may use derivatives to gain exposure to investments exceeding the value of the fund (leverage). This may cause greater changes in the fund’s price and increase the risk of loss.

The fund may use derivatives with the aim of profiting from a rise or a fall in the value of an asset (for example, a company’s bonds). However, if the asset’s value varies in a different manner, the fund may incur a loss.

Changes in currency exchange rates will affect the value of your investment.

If the share class is hedged (H share class), it aims to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders of the hedged share class from benefiting if the hedged share class currency falls against sterling.

Where market conditions make it hard to sell the fund’s investments at a fair price to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s shares.

Some transactions the fund makes, such as placing cash on deposit, require the use of other financial institutions (for example, banks). If one of these institutions defaults on their obligations or becomes insolvent, the fund may incur a loss.

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

Richard Woolnough

Richard Woolnough - Fund manager

Richard Woolnough joined M&G in January 2004 and is fund manager of the M&G (Lux) Optimal Income Fund, as well as of the M&G Optimal Income Fund, the M&G Corporate Bond Fund and the M&G Strategic Corporate Bond Fund, three of the company’s flagship UK-authorised fixed interest OEIC funds. Richard began his career at Lloyds Merchant Bank in 1985, moving to Italian insurer Assicurazioni Generali two years later, followed by SG Warburg. In 1995, he became a fund manager at Old Mutual. Richard graduated from the London School of Economics with a BSc in economics.

 Team member biography
Stefan Isaacs

Stefan Isaacs - Deputy Manager

Stefan Isaacs is Deputy Head of Retail Fixed Interest for M&G's mutual fund range. He joined M&G as a graduate in 2001 and was subsequently promoted to corporate bond dealer specialising in high yield bonds and euro-denominated credit. Stefan joined the fund management team in 2006 and was appointed fund manager of the M&G European Corporate Bond Fund in April 2007 and the M&G Global High Yield Bond Fund in October 2010. Stefan is also deputy fund manager of the M&G Optimal Income Fund, the M&G European High Yield Fund and the M&G Global Floating Rate High Yield Fund.

 Team member biography
Carlo Putti

Carlo Putti - Investment specialist

Carlo Putti is an associate investment specialist providing support for the M&G retail fixed interest fund range. He initially joined M&G in 2009, working on a part-time basis in the M&G Milan office, assisting the Italian Sales team. In 2013 Carlo moved to London, where he joined the M&G International Marketing team as a marketing executive before transferring to the M&G Retail Fixed Interest team nine months later. Carlo holds a degree in business economics from Cattolica University (Italy).

 Team member biography

Ratings

Rating is at a share class level

5 Star Rating

Rating is at a fund level

Silver Standard

Ratings as at 30/09/2018. The Morningstar Overall Rating. Copyright © 2018 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2018 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.

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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.