M&G (Lux) Global High Yield ESG Bond Fund

Objective and investment policy

Objective

The fund aims to provide a combination of capital growth and income while considering environmental, social and governance (ESG) factors, and seeks to achieve a higher ESG rating than the global high yield market.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in lower quality bonds, denominated in any currency, and issued by companies located in any country, including emerging markets.


The fund’s currency exposure is typically hedged back to the US dollar.


The fund invests in securities that meet the investment manager’s assessment of 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 investment: The fund may also invest in, asset-backed securities, contingent convertible debt securities, cash and assets that can be turned quickly into cash.

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 investment approach is based on an in-depth analysis of corporate bonds and their issuers, combined with an assessment of macroeconomic factors such as economic growth, interest rates and inflation. Spreading investments across issuers, industries and countries is an essential element of the fund’s strategy. 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 ICE BofA Merrill Lynch Global High Yield USD Hedged 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.

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.

High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.

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.

Fund Team

James Tomlins

James Tomlins - Fund manager

James Tomlins is fund manager of the M&G (Lux) Global Floating Rate High Yield Fund and co-manager of the M&G (Lux) Global High Yield Bond Fund, M&G (Lux) Floating Rate High Yield Solution, M&G (Lux) Global High Yield ESG Bond Fund and M&G (Lux) Global High Yield Bond 2023 Fund since launch. James is a specialist in high yield credit with more than 10 years’ experience in this sector. He was previously an analyst and then a fund manager at Cazenove Capital Management. Before Cazenove, James was at KBC Alternative Investment Management; in the three years prior to that, he worked at Merrill Lynch Investment Managers. James is a CFA charterholder and graduated with an MA in history and PgDip in economics from the University of Cambridge.

 Team member biography
Stefan Isaacs

Stefan Isaacs - Co-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. He is co-fund manager of the M&G (Lux) Floating Rate High Yield Solution, launched in August 2017 and the M&G (Lux) Global High Yield ESG Bond Fund, launched in October 2017. 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
Lu Yu

Lu Yu - Deputy Manager

Lu Yu was appointed deputy fund manager of the M&G (Lux) Global High Yield ESG Bond Fund in March 2019. Lu joined M&G in September 2007 as part of the graduate intake and worked as a business analyst. In March 2010 she transitioned to corporate credit research and spent eight years working on sectors including airlines, aerospace & defence and auto, researching both investment grade and high yield bonds. Her primary focus is on high yield bonds and ESG engagement. Lu holds a BEng of Computer Science and Technology from Dalian University of Technology (China), and a MSc in Multimedia Technology from University of Bath. She is a CFA charterholder.

 Team member biography

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