M&G has launched a global corporate bond strategy in response to increased investor demand for large-scale bond diversification products.
The M&G Global Corporate Bond fund will be run by co-managers Ben Lord and Mario Eisenegger, supported by analysts based across the firm’s UK, Asia, Europe and US branches.
The managers will seek to exploit relative value opportunities and aim to outperform the global investment grade bond market over any 5-year period.
As part of its investment policy, at least 80% of the strategy will be deployed in investment grade bonds issued by companies globally, denominated in any currency, spread across issuers, industries and countries. It is benchmarked against the Bloomberg Global Aggregate Corporate Index (GBP Hedged).
The strategy, which has been launched with a £164m external investment, adds to the firm’s £123bn fixed income assets under management.
Jim Leaviss, M&G’s CIO of fixed income, said: “In our view, we could see big opportunities for bond investors in 2024. With a wall of cash waiting to re-enter the market after last year’s high interest rates and continued inflation concerns sparking further interest rate reductions, a boom in the US bond markets looks likely.
“If the Federal Reserve cuts rates as early as March, this could trigger falling bond yields and lock in significant gains for early investors.”