M&G Global Macro Bond: June 2026 fund update

• Jim Leaviss, who had managed the fund since inception in 1999, left M&G in 2024

• The new managers have tweaked how the fund is invested

• The fund is in the Global Bond sector, rather than £ Strategic Bond, so the managers have more flexibility to invest in foreign currencies. This means that the fund could help to diversify a UK-focused bond portfolio

• This fund does not feature on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The manager aims to generate a combination of income and growth over the long term. Although some income will be generated, total returns are the priority for the managers and, therefore, the level of income will vary over time. As such, it may not be suitable for investors looking for a high income. The fund could be held alongside equity funds for a diverse source of income or combined with more UK-focused bond funds to add geographical diversification to fixed income portfolios.

The fund has overseas currency exposure, which could add diversification to a portfolio with currency-hedged bond exposure. That said, the currency exposure can lead to large performance swings over the short term, which adds risk. We would, therefore, expect this fund to be held alongside other bond funds.

Manager

Jim Leaviss was lead manager of the fund from launch, in 1999, until he left M&G and the investment industry in August 2024.

Eva Sun-Wai and Robert Burrows are now co-managers of the fund. Sun-Wai joined M&G in 2018 on their investment graduate scheme, spending time rotating across several different bond teams. She joined the fund manager team in September 2019 before becoming deputy manager on this fund, as well as lead manager of the M&G Global Government Bond fund, in January 2021. She became co-manager alongside Leaviss on this fund in 2023.

Burrows joined M&G in 2007 and specialises in government bond investing. He has managed a number of investment strategies for institutional investors since he joined. He was named as co-manager alongside Sun-Wai on 1 August 2024.

Leaviss’ departure from the industry is a blow to the fund, given his significant experience and knowledge of bond investing. We view Burrows and Sun-Wai as competent investors. However, the lack of a public track record for Burrows, alongside Sun-Wai’s relatively short time in the industry, were the reasons behind the fund’s removal from our Wealth Shortlist.

Process

The managers start with their 'bigger picture' macroeconomic outlook. This includes forming a view on economic growth, interest rates and inflation globally. This helps them decide how much to invest in different areas of the bond market.

The fund’s underlying investments tend to change a lot and can move quite quickly if the managers think that this is necessary. They are likely to invest more in corporate (including high-yield) and emerging market bonds when they are positive and invest a greater proportion of the fund in government bonds when their outlook is cautious. Investing in high-yield and emerging market bonds increases risk. They can also use derivatives to enhance returns. This allows them to quickly vary exposure to different types of bonds and currencies, as well as benefit from falls in asset prices and rising interest rates, but is a higher-risk approach.

The freedom to buy bonds issued in different currencies also means that movements in currency exchange rates can add or detract value. The fund may invest more than 35% in securities issued or guaranteed by a member state of the European Economic Area or other countries listed in the fund’s prospectus. The managers, therefore, have a lot of flexibility in managing the fund, but trying to bring all of these different factors together can add risk.

Since Sun-Wai and Burrows have taken over as managers, they’ve focused on generating small amounts of outperformance from lots of different investments. This is a change from the previous manager, who at times had some bigger investments in a few specific ideas. The impact of this has been that performance has been more similar to the benchmark with lower volatility than before.

At the end of April 2026, the fund had 50.2% invested in developed market government bonds and a further 20.4% in emerging market bonds. While the managers continue to invest in corporate bonds, they are using derivatives to reduce the impact of changing prices in this area of the bond universe. In terms of currencies, the largest exposures are to the US Dollar, the Euro and the Japanese Yen.

The fund’s duration was 6.5 years at the end of April. Duration is a measure of the sensitivity of a bond‘s price to a change in interest rates and is measured in years. The higher the level of duration, the more sensitive the fund is to interest rate changes.

Culture

The Fixed Interest team at M&G are very experienced investors. The fact that Sun-Wai and Burrows can call on the views of this talented team should help them to make the most of the fund’s flexible, ‘go anywhere’ mandate to take advantage of the best ideas across the bond market.

The managers are incentivised based on the performance of the fund over a number of years. We think this is positive as it aligns their interests with those of investors in the fund. We believe there are only a handful of investors with the skill to successfully manage a fund in this sector, but the team at M&G are well equipped and have the resources to potentially do a good job for long-term investors.

ESG Integration

Although M&G applies a house-level exclusion for controversial weapons and companies with significant involvement in thermal coal, each fund manager is encouraged to think about ESG in a way that’s appropriate to their fund. All investment teams are equipped with tools to effectively integrate ESG considerations, including the M&G Corporate ESG Scorecard – an analysis template that generates Environmental, Social and Governance scores, enabling cross-company comparisons and ongoing monitoring – and a climate scenario analysis tool. The firm offers a range of sustainable and impact funds, which seek to deliver certain responsible objectives, alongside a financial return.

M&G’s Stewardship and Sustainability team supports fund managers and analysts on ESG matters and coordinates the firm’s stewardship activities. It engages with companies on ESG issues and discharges the firm’s voting responsibilities, in conjunction with the fund managers. The firm publishes full voting reports on a quarterly basis, and a rationale is provided for abstentions and votes against management. A voting summary and engagement case studies are made available in the firm’s annual Stewardship report.

Although the firm has integrated analysis of ESG risks into their assessment of investment opportunities, this fund is not specifically sustainably invested, meaning it can invest in bonds issued by companies that some investors could find unethical.

Cost

This fund has an ongoing annual charge of 0.65%, but we've secured HL clients an ongoing saving of 0.17%. This means that you pay a net ongoing charge of 0.48%. This saving is achieved in the form of a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP.

Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform charge applies.

We recently made some changes to the amount that clients pay to invest with us. Find out more about these changes.

Performance

Over the last 12 months the fund rose 3.93%*, underperforming the IA Global Mixed Bond sector, which gained 4.75%. Past performance isn’t a guide to future returns. Given the change of manager in August 2024, performance prior to this date is attributable to Leaviss rather than to the current management duo.

Although the new managers have lagged peers in the IA Global Mixed Bond sector since they took over, they have outperformed their benchmark.

This outperformance has come from a variety of small gains from lots of different investments. Examples include a shorter duration position in March 2026 during the onset of the Iran war and having more invested in government bonds from Latin America during 2025.

The change in process seems to be working as intended. However, less than two years in, it’s still too early to assess performance.

At the end of April 2026, the fund’s distribution yield was 3.65%, although remember that yields are variable and aren’t a reliable indicator of future income.