Global Government Bond Fund

ISIN
GB00BMP3RY07

Price (20.02.2019)
11.43

% Price Change
-0.16

Objective and investment policy

Objective

The fund aims to provide income and capital growth.

Investment policy and strategy

Core investment: At least 70% of the fund is invested in investment grade (high-quality) bonds issued by governments, or are guaranteed by governments, from anywhere in the world. 

Other investments: The fund also invests in bonds with a lower credit rating than investment grade issued by governments, or are guaranteed by governments. In addition, it may hold cash or assets that can be turned into cash quickly. 

Use of derivatives: Derivatives may be used to invest indirectly in bonds, to reduce risks and costs and to manage the impact of changes in currency exchange rates on the fund’s investments. 

Strategy in brief: The fund manager selects investments based on an assessment of macroeconomic factors such as economic growth, interest rates and inflation.

This analysis determines the individual government bonds from different countries in which the manager believes the fund should invest in order to achieve its objective. It also influences the currencies to which the fund will be exposed. The manager is assisted in the selection of individual government bonds by the deputy fund manager and an in-house team of analysts. The fund is diversified by investing in a range of government bonds from across the globe. 

Glossary terms 

Bonds: Loans to governments and companies that pay interest. 

Derivatives: Financial contracts whose value is derived from other assets.

Risks associated with the fund

The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective, and you may not get back the amount you originally invested.

Changes in currency exchange rates will affect the value of your investment.

The fund may use derivatives with the aim of profiting from a rise or a fall in the value of an asset (for example, a company’s bonds). However, if the asset’s value varies in a different manner, the fund may incur a loss.

When interest rates rise, the value of the fund is likely to fall.

The value of the fund may fall if the issuer of a fixed income security held is unable to pay income payments or repay its debt (known as a default).

The fund will invest in emerging markets which are generally smaller, more sensitive to economic and political factors, and where investments are less easily bought and sold. In exceptional circumstances, the fund may encounter difficulties when selling or collecting income from these investments, which could cause the fund to incur a loss. In extreme circumstances, it could lead to the temporary suspension of dealing in shares in the fund.

Where market conditions make it hard to sell the fund’s investments at a fair price to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s shares.

Some transactions the fund makes, such as placing cash on deposit, require the use of other financial institutions (for example, banks). If one of these institutions defaults on their obligations or becomes insolvent, the fund may incur a loss.

Other information

The fund may invest more than 35% in securities issued by any one or more of the governments listed in the fund prospectus.  Such exposure may be combined with the use of derivatives in pursuit of the fund objective.  It is currently envisaged that the fund’s exposure to such securities may exceed 35% in the governments of Germany, Japan, UK, USA although these may vary subject only to those listed in the prospectus.

The Fund allows for the extensive use of derivatives. 

Performance

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate. Past performance is not a guide to future performance.

On 01 June 2013, 01 July 2014 and 01 July 2016, the fund’s performance comparative index changed.

Past performance shown from the date selected to 31 May 2013 is the CITI Group Non GBP World Government Bond Index. Past performance shown from the 01 June 2013 to 30 June 2014 is the Barclays Global Aggregate Treasury Custom 3bn Index. Past performance shown from 01 July 2014 to 30 June 2016 is the Barclays Global Treasury Index. As from 01 July 2016 the fund no longer has a performance comparative index.


Source: Price: State Street. Performance: Morningstar. For non-Sterling share classes for fixed income and global convertibles funds, performance figures are shown on a price to price with gross income reinvested basis*. For equities and multi-asset funds, performance figures are shown on a price to price with net income reinvested basis. For Sterling share classes performance figures are on a price to price with net income reinvested basis. Performance figures may not reflect all relevant charges.

Fund Team

Claudia Calich

Claudia Calich - Fund manager

Claudia Calich joined M&G in October 2013 as a specialist in emerging markets debt and was appointed fund manager of the M&G (Lux) Emerging Markets Hard Currency Bond Fund at its launch in May 2017. She has been fund manager of the M&G Emerging Markets Bond Fund since December 2013. She was also appointed fund manager of the M&G Global Government Bond Fund and deputy manager of the M&G Global Macro Bond Fund in July 2015. Claudia has over 20 years of experience in emerging markets, most recently as a senior portfolio manager at Invesco in New York, with previous positions at Oppenheimer Funds, Fuji Bank, Standard & Poor’s and Reuters. Claudia graduated with a BA honours in economics from Susquehanna University in 1989 and holds an MA in international economics from the International University of Japan in Niigata.

 Team member biography
Jim Leaviss

Jim Leaviss - Deputy Manager

Jim Leaviss is Head of Retail Fixed Interest for M&G’s mutual fund range. He joined M&G in 1997 after five years at the Bank of England. As well as heading up the team, Jim is co-manager of the M&G (Lux) Absolute Return Bond Fund and also manages the M&G Global Macro Bond Fund and is deputy fund manager of the M&G Global Government Bond Fund.

 Team member biography
Pierre Chartres

Pierre Chartres - Investment specialist

Pierre Chartres joined M&G in July 2013 from BNY Mellon Asset Management, where he worked for seven years, most recently as a portfolio strategist designing, developing and managing multi-asset, multi-manager investment solutions. Prior to that, Pierre spent two and a half years at Natixis Asset Management in Paris. He has a Masters-level degree in business and finance from ESSCA Business School, Angers, France and is a CFA charterholder.

 Team member biography

Ratings

Rating is at a share class level

5 Star Rating

Ratings as at 31/12/2018. The Morningstar Overall Rating. Copyright © 2019 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2019 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.

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