Bestinvest says
This fund benefits from one of the most respected bond teams in the peer group with a proven track record across market cycles. However, it should be noted that the fund carries a higher risk than their other funds due to its high yield nature. The fund's performance has generally been consistent with the broader IMA Sterling High Yield universe despite the broad mandate of the fund. The management team combines M&G's pre-eminent fixed income manager, Jim Leaviss, and their corporate bond manager in Europe, Stefan Isaacs. This fund will carry a higher risk than their other funds.
The manager combines his top down macro-economic (global economic prospects) view with individual bond specific analysis. This reflects his view that the high yield bond market is 60% driven by credit risk (company specific risk) and 40% by interest rate risk. The other key point to emphasise is that M&G's Bond team believe that the ability to avoid mistakes at an individual stock level is of greater importance over the long term than consistently picking the best performers in the asset class. However this fund is likely to carry a higher risk than the manager's other funds. M&G have an extensive fixed income credit research team that currently numbers over 20 people. They are divided between sectors and internally rate bonds. Watch and risk lists are then created for the manager to consider, however, these are for guidance purposes only. The manager is allowed discretion to buy bonds on these lists. To increase diversification the portfolio will typically have more than 100 bond issuers at any one time.