M&G (Lux) Global Listed Infrastructure Fund

Objective and investment policy

Objective

The fund has two aims:
- to provide a combination of capital growth and income to deliver a return that is higher than that of the global equities market over any five-year period;
- to increase the income stream every year in US dollar terms.

Investment policy and strategy

Core investment: At least 80% of the fund is invested in shares issued by infrastructure companies, investment trusts and real estate investment trusts of any size, that are domiciled in any country, including emerging markets*. The fund usually holds shares in fewer than 50 companies. The minimum 80% allocation may include ordinary shares, preference shares and convertibles. Infrastructure companies include businesses in the following sectors: utilities, energy, transport, health, education, security, communications and transactions. Companies that derive more than 30% of their revenue from coal-fired and nuclear power are excluded from the investment universe, as are industries such as tobacco, alcohol, adult entertainment, gambling and weapons. United Nations Global Compact principles on human rights, labour, environment and anti-corruption are also considered in the analysis of companies.

Other investment: The fund may also invest in other funds, cash and assets that can be turned quickly into cash.

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

* 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 fund’s stock selection is driven by in-depth analysis of individual infrastructure companies. The investment manager seeks to invest in businesses with excellent capital discipline and the potential for long-term dividend growth. Stocks with different drivers of dividend growth are selected to construct a portfolio that has the potential to cope in a variety of market conditions. The fund is expected to exhibit lower fluctuations in returns and offer a higher dividend yield than the global stockmarket, which is consistent with the characteristics of infrastructure securities. Sustainability considerations encompassing environmental, social and governance (ESG) issues are fully integrated into the investment process.

Performance comparator: The fund is actively managed. The MSCI All Countries World Index is a point of reference against which the performance of the fund may be measured.

Glossary terms

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.

Dividend yield: Annual income distributed as a percentage of the share price. Preference shares: Loans to a company that may be traded in the same way as an ordinary share, but generally have a higher yield and pay dividends on fixed dates.

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 holds a relatively small number of investments and, as a result, may experience larger price rises and falls than a fund which holds a larger number of investments.

The fund will invest in emerging markets which are generally more sensitive to economic and political factors, and where investments are less easily bought and sold.In exceptional circumstances,the fund may encounter difficultieswhen 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.

Convertibles are subject to the risks associated with both bonds and company shares, and to risks specific to the asset class. Their value may change significantly depending on economic and interest rate conditions, the creditworthiness of the issuer, the performance of the underlying company shares and general financial market conditions. In addition, issuers of convertibles may fail to meet payment obligations and their credit ratings may be downgraded. Convertibles may also be less liquid than the underlying company shares.

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 invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash.

Fund Team

Alex Araujo - Fund manager

Alex Araujo was appointed manager of the M&G Global Listed Infrastructure Fund and the M&G (Lux) Global Listed Infrastructure Fund which were launched in October 2017. He joined M&G’s income team in July 2015 and was named co-deputy manager of the M&G Global Dividend Fund in April 2016. Alex has more than 20 years’ experience in financial markets, having previously worked at UBS and BMO Financial Group. He graduated from the University of Toronto with an MA in economics and is a CFA charterholder.

 Team member biography
John Weavers

John Weavers - Deputy Manager

John Weavers has been the fund manager of the M&G North American Dividend Fund since April 2015. In January 2016, he was appointed deputy fund manager of the M&G Global Dividend Fund before being joined by Alex Araujo as co-deputy fund manager in April 2016. John is also the deputy fund manager for the M&G Global Listed Infrastructure Fund and the M&G (Lux) Global Listed Infrastructure Fund which were launched in October 2017. Prior to April 2015, John was deputy fund manager of the M&G Pan European Dividend Fund and the M&G Dividend Fund for two years. John joined M&G as a graduate in 2007 and worked as an analyst in the Equity Research team before joining the Income team in January 2012. He graduated from Oxford University with an honours degree in politics, philosophy and economics and is a CFA charterholder.

 Team member biography

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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.