The fund has three aims:
- To provide an annual yield higher than that of the FTSE All-Share Index;
- To provide an income stream that increases every year;
- To provide a higher total return (the combination of capital growth and income), net of the Ongoing Charge Figure, than that of the FTSE All-Share Index over any five-year period.
Investment policy and strategy
At least 70% of the Fund is invested in equity securities and equity-related securities of companies across any sector and market capitalisation, that are incorporated, domiciled, listed or do most of their business in the United Kingdom.
The Fund may also invest in other transferable securities, including the shares of non-UK companies, cash and near cash directly or via collective investment schemes (including funds managed by M&G).
Derivatives may be used for efficient portfolio management and hedging.
The Fund employs a disciplined approach to investment which concentrates on the analysis and selection of individual companies.
The Fund typically invests in a well-diversified portfolio of high-yielding UK stocks. The yield premium attached to the Fund generally means that there is a bias towards good value, out of favour stocks (i.e. those stocks which the fund manager considers to be undervalued by the market). The emphasis on yield helps to identify stocks that are relatively cheap and to avoid those that are expensive. From the universe of high yielding stocks, the fund manager identifies companies that are competitive, with a strong business franchise and that have attractive dividend growth prospects.
Benchmark: FTSE All-Share Index
The Fund is actively managed. The benchmark is a target which the Fund seeks to outperform. The index has been chosen as the Fund’s target benchmark as it best reflects the scope of the Fund’s investment policy. The target benchmark is used solely to measure the Fund’s performance and income objective and does not constrain the Fund's portfolio construction.
The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.