M&G Global High Yield Bond A

Invests predominantly in high yield securities, the balance of about 30% in investment grade (higher quality bonds).

  • 49.14p Price (Inc)
  • 139.89p Price (Acc)
  • 3.00% 0.00% Initial charge
  • 1.25% Annual management charge
  • 1.41% Ongoing charges
  • 5.00% Yield

Prices as at 06 December 2019, fund data last updated 15 December 2011

This fund aims to generate a high total return and income by investing predominantly in high yield corporate bonds within the UK. The minimum exposure to high yield bonds will be 50%. The mandate of the fund does allow investment outside the UK, all currency exposure is hedged to Sterling.

Fund summary

Sector £ High Yield
Structure OEIC
Launched October, 2002
Size £1,025m
Yield 5.00%
Charging basis Income
Dividends paid Last day of each month

Charges

Standard initial charge 3.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.25%
Ongoing charges figure 1.41%

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Investment process

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.

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 IA 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.

Manager research

Average monthly relative returns

  • 14/15 -1.19%
  • 15/16 0.89%
  • 16/17 0.69%
  • 17/18 -0.01%
  • 18/19 -0.66%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years -0.06%
  • Career 0.01%
  • 3 years 56.40%
  • 5 years 50.40%
  • Career 68.40%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Stefan Isaacs

Isaacs joined M&G in 2001 initially in the performance analytics team, moving into the fixed income team as a fund manager's assistant in 2002. In 2003 he was promoted to corporate bond dealer, specialising in high yield bonds and structured credit. Isaacs joined the fund management team in 2006 as an assistant fund manager covering high yield bonds for retail funds. He was appointed fund manager of the M&G European Corporate Bond Fund in April 2007 and became the fund manager of the M&G European High Yield Corporate Bond Fund in August 2007. Isaacs graduated from Manchester Metropolitan University with a degree in International Business and French.

Track record

Stefan Isaacs has 12.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.01%. During the worst period of relative performance (from July 2013 - November 2015) there was a decline of 22% relative to the index. The worst absolute loss has been 18%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 68%.

Periods of worst performance

Absolute -18.00% (August 2008 - October 2008)
Relative -22.00% (July 2013 - November 2015)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 July 2019

4.9179% Hm Treasury United Kingdom Dmo 3.75% Gilt 07/09/19 Gbp0.01
1.3199% Sirius Xm Hldgs Inc 5% Bds 01/08/27 Usd2000
1.1614% Netflix Inc 3.625% Bds 15/05/27 Eur10000
1.1475% Bausch Health Cos Inc 7% Bds 15/01/28 Usd1000
1.1074% Telefonica Europe Bv Var Undated Bds Eur100000
.9321% Sprint Corp 7.875% Bds 15/09/23 Usd2000
.9269% Cabot Financial Luxembourg Sa 7.5% Bds 01/10/23 Gbp100000 Reg S
.9142% Petrobras Global Finance Bv 7.375% Bds 17/01/27 Usd2000
.8993% Ard Finance Sa 6.625% Bds 15/09/23 Eur1
.8925% Cco Hldgs Llc/Cap Corp 5.75% Bds 15/02/26 Usd1000
Source: Trustnet

Sector breakdown

Energy 11.00%
Health Care 10.00%
Media 10.00%
Basic Industries 9.00%
Capital Goods 8.00%
Retail 7.00%
Telecommunications 6.00%
Banks 5.00%
Automotive 5.00%
Money Market 4.00%

Portfolio

At least 50% invested in high yield bonds. Maximum exposure to leveraged loans will be 10%. The manager can buy preference shares but cannot use derivatives.

Key Investor Information - Income

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Key Investor Information - Accumulation

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