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M&G UK Inflation Linked Corporate Bond Fund Inclusive - Class A - Income (GBP)

Sell:118.91p Buy:118.91p Change: 0.43p (0.36%)
Prices as at 23 May 2022
Change: 0.43p (0.36%)
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 23 May 2022
Change: 0.43p (0.36%)
Prices as at 23 May 2022
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 »

The fund aims to deliver a return greater than UK inflation over the long term. The income and value of some of the bonds it invests in should rise in line with inflation. It also invests in some conventional bonds that aren't tied to inflation, but could help boost returns.

We think the fund's run by an experienced and capable team. It's a conservative option, so returns are likely to be unexciting when inflation's subdued. It could come into its own when inflation is higher than expected.

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 generally kept pace with UK inflation, as measured by the Consumer Price Index, since launch. We'd expect it do so over the longer term, and to offer some shelter when broader bond markets are going through a tough patch.

Investment Philosophy

Inflation erodes the spending power of your money over time. So the managers aim to invest the fund in a way that could stop this from happening. The idea is to deliver inflation-beating returns over the long term.

Process and Portfolio Construction

The managers invest partly in short-dated, index-linked government and corporate bonds. They also use derivatives to add some corporate bond exposure alongside the index-linked bonds. This additional flexibility gives the managers greater scope to achieve an inflation-beating return, although it adds risk. The managers can also invest in higher-risk, high-yield bonds should they see fit.

Derivatives are also used to reduce the sensitivity of the fund to rising inflation or interest rates. They can keep the fund's duration low if inflation or interest rates are expected to rise, for example. A lower duration stance offers some shelter against rising interest rates, as the prices of short-duration bonds fall to a lesser extent than long-duration bonds when interest rates rise, or are expected to rise.

In addition to the UK, the managers invest in bonds issued by other areas such as the US and Europe.

question mark Manager Track Record Based on HL Quantitative Research

  • M&G UK Inflation Linked...
  • IA £ Strategic Bond

Fund Track Record

23/05/17 to 23/05/18 23/05/18 to 23/05/19 23/05/19 to 23/05/20 23/05/20 to 23/05/21 23/05/21 to 23/05/22
Annual return 0.29% 0.96% 0.98% 3.85% -0.03%

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: Ben Lord
Manager start date: 17 September 2010
Manager located in: london

Ben Lord joined M&G in 2007 and was appointed fund manager of the M&G Global Corporate Bond Fund from launch in September 2013. He is also fund manager of the M&G UK Inflation Linked Corporate Bond Fund and deputy manager of the M&G European Inflation Linked Corporate Bond Fund, the M&G Strategic Corporate Bond Fund, the M&G Corporate Bond Fund and the M&G Short Dated Corporate Bond Fund. Ben previously worked at Gordian Knot as a credit analyst covering global financial institutions. He obtained an MA (Hons) from the University of Edinburgh and is a CFA charterholder.

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