Income Allocation Fund

Objective and investment policy

Objective

The fund has two aims:
- To provide a growing level of income over three years by investing in a mix of assets from around the world
- To provide capital growth over five years or more

Investment policy and strategy

Core investment: The fund is typically invested in a mix of assets, including company shares, bonds, convertibles and currencies. It may also invest in property through other funds.

Other investments: Generally, less than 10% is held as cash or assets that can be turned into cash quickly. Such assets may be held to back the fund’s use of derivatives.

Use of derivatives: The fund is typically invested directly in assets, but derivatives may be used to invest indirectly. Derivatives may also be used 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 has a flexible investment approach with the freedom to invest in different types of assets in response to changes in economic conditions and the valuation of assets. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of market reactions to events to identify investment opportunities. The fund manager holds at least 70% of the fund in euro assets.

Glossary terms

Bonds: Loans to governments and companies that pay interest.

Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.

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.

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.

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

If the share class is hedged (H share class), it aims to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders of the hedged share class from benefiting if the hedged share class currency falls against the euro.

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 allows for the extensive use of derivatives.

Performance

News

Fund Team

Steven Andrew

Steven Andrew - Fund manager

Steven Andrew joined M&G in 2005 as a member of the portfolio strategy & risk team, before moving to the Multi Asset team, where he helped to formulate asset allocation strategies for M&G's multi-asset fund range. In November 2010, Steven was appointed manager of the M&G Episode Income Fund. Three years later, he became manager of the M&G Income Allocation Fund upon its launch. Steven began his career at the Bank of England in 1987 and subsequently worked at F&C Asset Management and Merrill Lynch before joining M&G. He holds a BSc (Hons) degree in financial economics from the University of London.

 Team member biography
Maria Municchi

Maria Municchi - Deputy Manager

Maria Municchi is deputy manager of the M&G Episode Income Fund and M&G Income Allocation Fund. Maria initially joined M&G in 2009 and was part of the Multi Asset and Convertibles teams providing support as investment specialist. Before joining M&G, Maria worked at Barings and UBS Asset Management. She has an MSc in international management and finance and is a CFA charterholder.

 Team member biography
Susanne Grabinger

Susanne Grabinger - Investment specialist

Susanne Grabinger joined M&G in 2010 and is currently an investment specialist providing support for M&G's multi-asset fund range and the M&G Global Convertibles Fund. Prior to joining M&G, Susanne worked at JPMorgan Asset Management as a client portfolio manager, focusing on institutional equity accounts and balanced mutual funds. She holds a master’s degree in business administration from the University of Bamberg, Germany, and is a CFA charterholder. Susanne is fluent in German and English and is also proficient in French and Spanish.

 Team member biography
Ana Cuddeford

Ana Cuddeford - Investment specialist

Ana Cuddeford is the investment specialist covering M&G’s multi-asset fund range and the M&G Global Convertibles Fund. She initially joined M&G in December 2013 from FTSE Group, where she had helped execute their FTSE4 Good company engagement. Prior to that, Ana spent 16 years in equity sales, the last 11 of which were at financial group Citi. She is fluent in English, Spanish and Italian and has a good command of French. Ana graduated from the University of Wales, College of Cardiff with a BSc (Hons) in European community studies.

 Team member biography
Christophe Machu

Christophe Machu - Investment specialist

Christophe Machu joined the Multi Asset and Convertibles teams as an associate investment specialist providing support for M&G's multi-asset fund range and the M&G Global Convertibles Fund in September 2014. He initially joined M&G in 2012 as a sales support in Paris before moving into the International Marketing team in London. Christophe has an MSc in risk and finance from EDHEC Business School.

 Team member biography

Graziano Creperio - Investment specialist

Graziano Creperio joined the M&G Multi Asset team as an associate investment specialist providing support for the M&G multi-asset funds. He initially joined M&G in 2012 as a fund data analyst and was later promoted to senior data specialist. Prior to joining M&G, Graziano worked as a portfolio data analyst at Morningstar. He holds a MSc in management and a BA in economics from Bocconi University in Milan. He also studied at Babson College in Boston and Jiao Tong University in Shanghai.

 Team member biography

Ratings

Rating is at a share class level

4 Star Rating

Ratings as at {Fund_Summary_Date}. The Morningstar Overall Rating. Copyright © 2017 Morningstar UK Limited. All Rights Reserved. The Morningstar Analyst Rating™. © 2017 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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For Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals. The value of investments will fluctuate, which will cause fund prices to fall as well as rise and investors may not get back the original amount invested.