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M&G Optimal Income Inclusive - Class X - Income (GBP)

Sell:150.68p Buy:150.68p Change: 0.08p (0.05%)
Prices as at 26 July 2021
Change: 0.08p (0.05%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 26 July 2021
Change: 0.08p (0.05%)
Prices as at 26 July 2021
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

This fund's run by the experienced and capable Richard Woolnough. He has the freedom to invest across global bonds markets, and he can even invest part of the fund in shares when he thinks they'll do better than bonds. This makes it a more adventurous option, aimed at those happy to take a bit more risk for potentially higher returns.

Richard Woolnough's wider economic and sector views tend to drive performance. He's got a good record of getting the big calls right, although he isn't successful every time. We think he'll do a good job for long-term investors. But the fund's ongoing charges are relatively high. We think there are other options in the sector that have great potential, but also come with lower charges.

Our view on the sector

Strategic bond funds have the freedom to invest across the fixed-interest spectrum, from traditional government and corporate bonds to higher-risk high-yield bonds. They can also invest up to 20% of the fund overseas and potentially benefit from currency movements. But this relies on the skill of the fund manager in making the right calls. Given the huge flexibility fund managers in this sector have, each fund should be judged on its own merits. Some focus on generating an income while others try to grow investors' money, or shelter it when times get tougher.

Performance Analysis

The fund has a good track-record. In recent years, it's been invested in anticipation of rising interest rates though and this hasn't been the right call. So it's not done as well as some other funds in the sector.

In 2008, at the height of the financial crisis, investors were rewarded as the fund performed relatively well. We think it has the potential to hold up better than some funds when markets are weak, but lag behind when they rise strongly.

Investment Philosophy

The fund's invested to reflect where Richard Woolnough thinks the global economy is heading. He also thinks it's critical to avoid bonds that don't repay investors when they're supposed to. The result is a fund that provides income with some growth potential too.

Process and Portfolio Construction

The fund's investments are chosen based on how the manager thinks the economies of different regions will perform. He's able to invest around the world to take advantage of his insights. The US and Europe often feature prominently and higher-risk Emerging Market bonds can also be held. He can hold bonds that will provide more shelter in harder times as well as higher-yielding bonds that can provide more income but are risker.

It's predominantly a bond fund but the manager is allowed to invest part of the fund in shares when he thinks they'll provide a better return than bonds. It can also use derivatives which offer a lot of flexibility but can increase risk.

question mark Manager Track Record Based on HL Quantitative Research

  • Merian Corporate Bond A Acc
  • IA £ Corporate Bond
  • M&G Strategic Corporate Bond...
  • M&G Optimal Income Sterling A Inc
  • IA £ Corporate Bond
  • IA £ Strategic Bond

Fund Track Record

26/07/16 to 26/07/17 26/07/17 to 26/07/18 26/07/18 to 26/07/19 26/07/19 to 26/07/20 26/07/20 to 26/07/21
Annual return 7.04% -0.32% 3.62% 0.30% 7.16%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

M&G was established in 1931, and is today one of the largest active investors in the UK. In 1999 M&G was acquired by Prudential, one of the largest financial services providers in the UK and Europe. M&G is an autonomous business unit within the Prudential Group, retaining its own style but benefiting from the advantages of belonging to a large parent company.

M&G is not interested in chasing 'hot stocks' or market fashions. Its fund managers invest for the long term and have the freedom to think independently and act on their convictions. They are also backed by M&G's extensive experience and in-house research capabilities, across all key asset classes - equities, fixed interest and commercial property. One sector in which M&G has been particularly successful is in corporate bonds.

Information about the fund

Fund manager biography

manager photo
Manager Name: Richard Woolnough
Manager start date: 8 December 2006
Manager located in: london

Richard Woolnough joined M&G in January 2004 and is fund manager of the M&G Optimal Income Fund, the M&G Corporate Bond Fund and the M&G Strategic Corporate Bond Fund, three of the company's flagship fixed interest funds. Richard began his career at Lloyds Merchant Bank in 1985, moving to Italian insurer Assicurazioni Generali two years later, followed by SG Warburg. In 1995, he became a fund manager at Old Mutual. Richard graduated from the London School of Economics with a BSc in economics.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account