M&G Corporate Bond Fund Sterling I Acc
New for 2018. Focuses on high quality European bonds
M&G European Corporate Bond has a modest yield at around 1.5 per cent, but has been introduced for 2018 because it offers bond exposure that is closer to 'home' than those with a global remit. Stefan Isaacs has considerable experience in European credit markets and has managed the fund since April 2007. He is backed by Wolfgang Bauer, who replaced Richard Woolnough as deputy manager in 2015.
The pair invest at least 70 per cent of the portfolio in high-quality bonds issued by companies denominated in any European currency. They can also invest up to 30 per cent in government and high-yield bonds. At least 90 per cent of holdings are either euro-denominated securities or hedged back to the euro. Their starting point is a top-down view on the economy. This is formed in collaboration with the fixed income team and determines the fund's positioning in terms of its credit risk, duration and sector exposures. In selecting bonds for the portfolio, the managers again draw on the expertise of credit analysts, each of whom undertakes fundamental research on specific sectors. They provide views on both their sectors and individual securities, and assign internal ratings to bonds based on a company's business and financial risks, bond structure and covenants. Default and event risks are monitored through 'to watch' and 'at risk' lists respectively.Morningstar likes the fund on the strength of its straightforward process that combines the strength of the analyst team with Isaacs' extensive experience. The merger of Prudential's UK and Europe asset management and insurance arms, to form M&G Prudential in 2017, has not changed its positive view.
Narrative and ratings content all as of 01 January 2018.See all Money Observer rated funds
|US Ultra Bond (CBT) Mar19||6.78 %|
|Long Gilt Future Mar19||4.90 %|
|Lloyds Bank plc 5.12%||1.48 %|
|Italy (Republic Of) 6%||1.42 %|
|AT&T Inc 4.88%||1.40 %|
|Wells Fargo Bank, National Association 5.25%||1.39 %|
|Bank of America Corporation 2.3%||1.07 %|
|Verizon Communications Inc. 5.01%||1.06 %|
|Heathrow Funding Limited 6.75%||1.01 %|
|Vodafone Group plc 3%||1.00 %|
|United Kingdom||85.38 %|
|Financial Services||21.14 %|
|Consumer Cyclical||17.90 %|
|Basic materials||9.28 %|
|Consumer Defensive||7.10 %|
|Real Estate||5.84 %|
Richard Woolnough joined M&G in January 2004 and is fund manager 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 fixed interest 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.
Data provided by Morningstar.
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