Objective and investment policy
The fund aims to provide a combination of capital growth and income to deliver a return based on exposure to optimal income streams in investment markets.
Investment policy and strategy
Core investment: The fund is a flexible fund where at least 50% will be invested in bonds. The fund invests in bonds issued by governments or companies in developed markets or emerging markets*. The investment manager has the freedom to invest across a broad range of bonds (such as government bonds, investment grade corporate bonds, high yield corporate bonds, unrated bonds and asset-backed securities), in any currency, wherever the greatest opportunities can be found.
Other investment: The fund may invest up to 20% in company shares when the investment manager believes that a company’s shares offer a better return than its bonds. The fund may also hold cash and assets that can be turned quickly into cash.
Use of derivatives: The fund invests directly and indirectly through derivatives. Derivatives may also be used to manage risks and reduce costs, as well as to offset the impact of currency exposures arising from the fund’s non-euro investments. Derivatives may also be used to generate market leverage (in other words, gain exposure to investment exceeding the value of the fund).
For more information on the types of bonds held and derivatives used, please refer to the Prospectus, which can be found by visiting www.mandg.lu/literature
* Emerging market countries are defined as those included within the MSCI Emerging Markets Index and/or those included in the World Bank’s definition of developing economies, as updated from time to time.
Strategy in brief: The investment manager selects investments based on an assessment of a combination of macroeconomic, asset, sector and stock-level factors.
Spreading investments across issuers and industries is an essential element of the fund’s strategy and the manager is assisted in the selection of individual bonds by an in-house team of analysts.
Performance comparator: The fund is actively managed. A composite index comprising 1/3 Bloomberg Barclays Global Aggregate Corporate Index EUR Hedged, 1/3 Bloomberg Barclays Global High Yield Index EUR Hedged and 1/3 Bloomberg Barclays Global Treasury Index EUR Hedged is a point of reference against which the performance of the fund may be measured. These indices represent the global investment grade corporate, global high yield corporate and global government bond markets, respectively.
Asset-backed securities: Bonds backed by assets that produce cashflows, such as mortgage loans, credit card receivables and auto loans.
Bonds: Loans to governments and companies that pay interest.
Derivatives: Financial contracts whose value is derived from other assets.
High yield bonds: Bonds issued by companies considered to be riskier and therefore generally paying a higher level of interest.
Investment grade corporate bonds: Bonds issued by a company with a medium or high credit rating from a recognised credit rating agency. They are considered to be at lower risk from default than those issued by companies with lower credit ratings.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.
The fund is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The Fund allows for the extensive use of derivatives.