M&G Income and Growth
M&G Episode Income
M&G Income and Growth is a multi asset fund that invests directly in individual stocks and bonds, while property exposure is gained by investing in property funds. The name “Episode” refers to those periods of time when investors' emotions cause them to act irrationally. The manager uses behavioural finance to find pockets of value and invest against the herd, rather than following it.
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Our Opinion
The episode multi-manager team has two strong differentiating attributes: it constantly looks for value created by investor irrationality and then takes positions that reflect those views. Investing directly into stocks and bonds gives greater liquidity within the fund, as well as keeping costs down. The M&G Income and Growth fund is particularly pertinent at the moment when the search for income has led to many investors chasing the same ideas.
Fund Managers
Steven Andrew, Co-Manager
Steven Andrew joined M&G in 2005, initially working in the portfolio strategy & risk team before moving to the Multi Asset team to develop asset allocation strategies for M&G's multi-asset funds. In November 2010, he became the manager of the M&G Income and Growth strategy, and three years later, he managed the M&G Income Allocation strategy upon its launch. Steven began his career at the Bank of England in 1987 and previously worked at F&C Asset Management and Merrill Lynch. He holds a BSc (Hons) in Financial Economics from the University of London.
Stefano Amato, Co-Manager
Stefano Amato joined M&G in November 2022 with 15 years of experience in asset management and financial markets. Before M&G, he was Head of Multi Asset Solutions at Santander Asset Management. His previous roles include portfolio management positions at JP Morgan and Centurion Group, and various roles at Societe Generale, Nomura, and Lehman Brothers. Stefano holds an MSc in Finance from the London Business School, a Masters in Behavioural Economics, and a BA in Communication Sciences and Technologies from IULM University in Milan.
Risk
Risk is primarily controlled through simple diversification. This diversification also allows the manager to produce a stable level of income. No position will account for more than 0.75% of the portfolio, which means individual holding risk is low.
Company Description
Founded in 1931, M&G Investments employs more than 2,000 people worldwide, including 350 investment specialists. The company was formerly owned by Prudential plc, but de-merged in 2019 to become listed on the London Stock Exchange. It 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.
Talking Factsheet
M&G Income and GrowthSteven Andrew
Quote from the Fund Manager
Our edge is in understanding the emotional sources of volatility .
Steven AndrewCo-Manager
Steven AndrewInvestment process
Attractive valuations are always the starting point with the M&G Income and Growth fund. Steven assesses a wide range of assets around the world and then seeks to identify what is driving something to be under-priced: there could be a valid reason, or it could be due to human behavioural factors. If it is the latter, by identifying market 'episodes', the team is able to buy and sell holdings that reflect its views at advantageous prices.
Risk
Risk is primarily controlled through simple diversification. This diversification also allows the manager to produce a stable level of income. No position will account for more than 0.75% of the portfolio, which means individual holding risk is low.
ESG
ESG - Integrated
M&G has clear and defined categories for the ESG focuses of its fund range. The Income and Growth fund financially integrates material ESG data into its risk management and decision-making process. There are some basic company-wide exclusions which apply to the fund, such as cluster munitions and anti-personnel mines. ESG analysis is performed by a third party and imported into the process. The team will always engage with management to better understand a company and advise on diverse matters, including ESG issues, but will not necessarily exercise its shareholder right to vote.
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