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M&G (Lux) Emerging Markets Income Opportunities Fund

Objective and investment policy

Objective

The fund aims to provide an annual yield of 4-6%. The fund also aims to grow capital over any five-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in emerging market assets including:

  • At least 25% in company shares across any sector and market capitalisation that are based, or do most of their business, in emerging markets;
  • At least 25% in bonds issued by companies or government-related institutions that are that are based, or do most of their business, in emerging markets;
  • Property-related securities.

The fund may invest in China A-Shares and in Chinese bonds denominated in Renminbi.

Other investment: The fund may invest in asset-backed securities, contingent convertible debt securities, other funds and cash or assets that can be turned into cash quickly.

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

Strategy in brief: The fund is actively managed. The fund employs a bottom-up approach to find the best investments to deliver on its income target while striving to generate long-term capital growth. . The fund’s allocation between bonds and shares is an output of the investment process and portfolio construction and, as such, will be the result of the investment manager investing in the best ideas, individually and relatively, across the capital spectrum.

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.

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

Charles de Quinsona

Charles De Quinsonas - Co-manager

Charles de Quinsonas is an emerging market corporate bond specialist and has been deputy fund manager of the M&G Emerging Markets Bond Fund since September 2015. He is also co-fund manager of the M&G (Lux) Emerging Markets Income Opportunities Fund, and has been the deputy fund manager of the M&G (Lux) Emerging Markets Hard Currency Bond Fund since launch in May 2017. Charles has more than 10 years of emerging market corporate bond experience, with a deep knowledge of high yield credit. Prior to joining M&G in 2014, he worked at Spread Research in Lyon and New York, where he spent four years analysing a variety of high yield and emerging market industrial credits. Charles holds a B.B.A. from ESSEC Business School and a MSc in Corporate Finance from iaelyon School of Management.

 Team member biography

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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.