M&G (Lux) Global Enhanced Equity Premia Fund

Objective and investment policy

Objective

The fund aims to provide a combination of capital growth and income that is higher than the global equities market over any five-year period.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in the shares of companies, across any sector and of any size, from anywhere in the world, including emerging markets. The fund may invest in China A-Shares via the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect.

Other investments: The fund may invest in other funds (including funds managed by M&G) and cash or assets that can be turned quickly into cash.

Derivatives: The fund may use derivatives to reduce the risks and costs of managing the fund.

Strategy in brief: The fund applies a systematic approach to the selection of stocks. Stocks are ranked on five key criteria or ‘Factors’: Value, Quality, Momentum, Volatility and Size. These rankings are then combined to provide a single ‘score’ for each stock. The weighting of each factor in the single score is determined by the investment manager. Historically, stocks exhibiting these characteristics (or Factors) have tended to deliver above-market returns (or equity premia). In constructing the portfolio, differences between the fund’s characteristics and those of its benchmark (such as sector, country or risk factor weightings) may be constrained.

Managing the fund in this way limits the degree by which the fund’s performance is expected to deviate from the benchmark.

Benchmark: MSCI ACWI Net Return Index

The benchmark is a comparator against which the fund’s performance can be measured. It is a net return index which includes dividends after the deduction of withholding taxes.

The benchmark has been chosen as the fund’s performance comparator as it best reflects the scope of the fund’s investment policy. The benchmark also acts as a constraint on the fund’s portfolio construction, as certain limits, such as constraints on sector or geographic exposure, may apply at any given time.

The fund is actively managed. Within the given constraints, the investment manager has freedom in choosing which investments to buy, hold and sell in the fund within the constraints defined. The fund’s portfolio holdings may deviate significantly from the benchmark's constituents.

For unhedged and currency hedged share classes, the benchmark is shown in the share class currency.

You can find more information about the objective and investment policy of the fund in the Prospectus.

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.

Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

The fund may invest in China A shares. Investments in assets from the People's Republic of China are subject to changeable political, regulatory and economic conditions, which may cause difficulties when selling or collecting income from these investments. In addition, such investment is made via the 'Stock Connects' systems, which may be more susceptible to clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.

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.

Fund Team

Gautam Samarth

Gautam Samarth - Co-manager

Gautam Samarth is the co-head of Systematic Investment Strategies at M&G. He has more than seven years of experience in quantitative strategies, and started managing systematic equity strategies in August 2018. He joined M&G in 2014 as a dedicated analyst on the M&G Leaders team and became deputy manager of the Global Leaders strategy on 1 April 2016. Prior to this, Gautam worked for five years at Credit Suisse in New York, where his last role was vice president in the HOLT Investment Strategy team. Gautam graduated from Trinity College (Hartford, Connecticut) in 2009 with a BS in economics and a Chinese language minor, and is a CFA charterholder.

 Team member biography
Marc Beckenstrater

Marc Beckenstrater - Co-manager

Marc Beckenstrater, co-head of Systematic Investment Strategies at M&G, has more than 10 years of experience in quantitative investments, having launched the first quantitative property real estate mutual fund in South Africa in 2006. In early 2017, Marc relocated to M&G Investments (at the time the parent company of Prudential South Africa) in London to lead an investment team managing Prudential’s international portfolios. Marc joined Prudential South Africa in 1999 as head of equity. He was chief investment officer from December 2009 until July 2016, and then head of international investments. Prior to joining Prudential, Marc worked at another large South African asset manager, where he was responsible for managing segregated pension funds and one of the satellite funds. He holds an MBA from the University of Cape Town and a BSc in Electrical Engineering from University of the Witwatersrand, Johannesburg.

 Team member biography

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