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Introducing M&Gs new funds

Targeting more than financial returns: Introducing M&G’s new funds


Insights

M&G Investments

20/01/2020


Would you like to pursue more than financial returns from investing? If so, there are approaches that aim to deliver shared returns for society and the environment, while pursuing financial returns for your future.


Take a look at our glossary for explanations of the investment terms used throughout this article.


There is a spectrum of approaches to responsible investment, from simply excluding companies in certain sectors or industries, to explicitly targeting a positive social and environmental impact.

M&G has recently launched two funds that look to align long-term financial returns with sustainability and impact goals: the M&G Sustainable Multi Asset Fund and the M&G Positive Impact Fund.

Despite having this common starting point, the two funds offer distinctive investment propositions. There are important differences between them, explained below, which will determine whether they might be suitable for your aspirations and needs.


Sustainable vs impact investing

Sustainable approaches look to make investments that contribute towards a more sustainable future for society and the planet.

Impact investing is where we invest in companies that have the explicit intention of addressing a range of societal and environmental issues the world is facing, while giving equal weight to healthy financial returns.


Individual benefit chart

Our approaches

At M&G, we believe there can be compelling long-term investment opportunities where companies deliver wider benefits through their activities. This should help to improve the sustainability of investments, as well as the sustainability of the planet.

We believe sustainable and impact investing should be open to all investors, regardless of the amount they invest. These two distinctive approaches, whose key characteristics are summarised in the table below, help make responsible investment accessible to everyone.


M&G Positive Impact Fund M&G Sustainable Multi Asset Fund
What is the fund's objective? Provide a combination of capital Growth and income, net of the ongoing charge figure, that is higher than the MSCI ACWI Index over any five-year period.

Invest in companies that have a positive impact on society through addressing the world's major social and/or environmental challenges.
Provide a combination of capital growth and income of 4-8% per annum, net of the ongoing charge figure, over any five-year period, while considering environmental, social and governance (ESG) factors.

There is no guarantee that the fund will achieve a positive return over five years or any other period and investors may not get back the original amount they invested.
What is the fund invested in? A concentrated portfolio of company shares from around the world; usually fewer than 40 stocks. A diversified blend of bonds, company shares and other assets from around the world.
How is the fund invested? The fund manager makes long-term investments in listed companies. Flexible allocation across different assets allows the the fund manager to capture value opportunities and diversify risk. Assets are selected to meet the fund manager's ESG or impact criteria.
Does the fund invest for impact? All investments in the portfolio are selected for their ability to deliver positive social and/or environmental impact. 10-30% of the portfolio is invested in companies selected for their ability to deliver positive social and/or environmental impact.

The rest is invested in the shares or bonds issued by companies and governments that uphold high ESG standards.
What are the main risks associated with this fund? The fund holds a small number of investments, and therefore a fall in the value of a single investment may have a greater impact than if it held a larger number of investments. 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. The fund allows for the extensive use of derivatives, which may be used to profit from an expected rise or fall ion the value of an asset. Should the asset's value vary in an unexpected way, the fund may lose as much or more than the amount invested.
What are the risks associated with both funds? The value and income from both funds' assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that either fund will achieve its objective and you may get back less than you originally invested.

Both funds can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

Before considering investment in any fund, please ensure you have read an up-to-date version of the Key Investor Information Document (KIID), which has a summary of the main risks relating to each fund. If you are unsure about the suitability of an investment, you should speak to a financial adviser.


The views expressed here should not be taken as a recommendation, advice or forecast.

You can find more information about either, and about any other fund in our range, on the M&G website. It is important that any investments are suitable for your goals and circumstances.

The value and income from any fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that any fund will achieve its objective and you may get back less than you originally invested.