FundCalibre’s most viewed funds of 2020
In what has been a roller-coaster year for investors, some things have remained comfortingly...
M&G Corporate Bond
This straight-forward corporate bond fund invests primarily in sterling-denominated investment grade debt. However, its highly-experienced manager, Richard Woolnough, can use up to 20% of the portfolio to invest in higher-yielding corporate bonds, government debt or asset-backed debt. M&G has one of Europe’s largest teams of credit analysts and therefore has a key competitive advantage in credit research.
Our opinion
The M&G Corporate Bond fund is run by a highly experienced manager and is often used as a core holding for corporate bond exposure. The vast depth of the fixed interest and dealing teams at M&G gives investors reassurance in terms of idea generation, risk controls and liquidity.
Company description
Founded in 1931, M&G Investments employs more than 2,000 people worldwide, including 350 investment specialists. The company, owned by Prudential plc, which is listed on the London Stock Exchange, focuses primarily on fixed interest and equities, but also invests in multi-asset and real estate. Many of its fund managers have been with the company for more than 20 years. Managers are given freedom to implement their own style on funds.
Fund manager
Richard Woolnough joined M&G in January 2004 and is also manager of Elite Rated M&G Optimal Income and M&G Strategic Corporate Bond funds. Richard began his career at Lloyds Merchant Bank in 1985. In 1995, he became a fund manager at Old Mutual. Richard graduated from the London School of Economics with a BSc in Economics.
The M&G Corporate Bond Fund is designed to be a steady, reliable corporate bond fund that can form a core part of clients’ portfolios.
Richard WoolnoughFund manager
Investment process
Richard's investment approach is very much ‘top-down’, meaning he will actively manage the portfolio according to his outlook for economic growth, inflation and interest rates. M&G’s in-house team of credit analysts provides analysis of the corporate bond market to help shape individual bond selection for the portfolio. The fund has a flexible mandate, which allows Richard greater investment freedom and enables him to take a high-conviction approach when selecting credits for the portfolio. However, it is generally less concentrated than its sister fund, M&G Strategic Corporate Bond, which has fewer holdings.
Risk
M&G Corporate Bond fund is very well diversified across hundreds of different positions. The fund has historically had slightly greater interest risk than its more focused sister fund M&G Strategic Corporate bond. This has led to it being slightly more volatile in the past.* Due to its popularity, the strategy (including similar funds sold in Europe) has become quite large and this is something we will keep an eye on in the future.
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