Obiettivo: Il fondo punta a generare reddito e crescita del capitale.
M&G European Corporate Bond Fund
un comparto di M&G Investment Funds (3)
Classe A in EUR – Azioni a distribuzione - Codice ISIN GB00B959HG95 Classe A in EUR – Azioni ad accumulazione - Codice ISIN GB0032178856
Gestito da M&G Securities Limited, parte del Gruppo Prudential
Informazioni chiave per gli investitori
Il presente documento contiene le informazioni chiave per gli investitori in relazione a questo Fondo. Non si tratta di un documento promozionale. Le informazioni contenute nel presente documento, richieste dalla legge, hanno lo scopo di aiutare a capire la natura di questo Fondo e i rischi a esso connessi. Si raccomanda di prenderne visione, in modo da operare una scelta informata in merito all’opportunità di investire.
Obiettivo e politica d’investimento
Obiettivo: Il fondo punta a generare reddito e crescita del capitale.
Investimento core: Almeno il 70% del fondo è investito in obbligazioni emesse da società e denominate in qualsiasi valuta europea.
Altri investimenti: Il fondo investe inoltre in titoli di Stato, obbligazioni ad alto rendimento e liquidità o attivi facilmente monetizzabili.
Utilizzo di derivati: I derivati possono essere utilizzati per investire indirettamente negli Investimento core o di altra natura. Essi possono essere utilizzati anche per ridurre i rischi e i costi e per gestire l’impatto dei cambiamenti nei tassi di cambio sugli investimenti del fondo.
Strategia in breve: Il gestore del fondo può decidere liberamente gli investimenti del fondo, secondo la sua valutazione di una combinazione di fattori macroeconomici, di attività, settoriali e legati alle singole azioni. La distribuzione degli investimenti tra diversi emittenti, settori e paesi è un elemento essenziale nella strategia del fondo e il gestore è assistito, nella selezione delle singole obbligazioni, di un team interno di analisti.
Glossario
Obbligazioni: Prestiti a governi e società che corrispondono un interesse.
Obbligazioni ad alto rendimento: Obbligazioni emesse da società considerate più rischiose e, pertanto, che corrispondono di norma un livello di interesse più elevato.
Derivati: Contratti finanziari il cui valore dipende da altre attività.
Altre informazioni
Questo fondo conferisce al gestore la libertà di decidere quali investimenti inserire nel portafoglio.
È possibile acquistare e vendere azioni del fondo in qualsiasi giorno lavorativo. Nel caso degli ordini pervenuti entro le 11:30 (ora dell’Europa centrale), le azioni saranno acquistate al prezzo vigente alla data dell’ordine.
Per i detentori di azioni ad Accumulazione, il reddito derivante dal fondo andrà a incrementare il valore dell’investimento effettuato.
Per i detentori di azioni a Distribuzione, l’eventuale reddito derivante dal fondo sarà versato all’investitore con frequenza trimestrale.
Oltre alle spese specificate nella relativa sezione, il fondo sosterrà i costi delle operazioni di portafoglio che saranno pagati a valere sulle sue attività. Questi possono essere più elevati quando gli investimenti sono effettuati al di fuori dell’Europa.
Profilo di rischio e di rendimento
Xxxxxxx basso Rischio elevato
Rendimenti generalmente inferiori Rendimenti generalmente superiori
1 | 2 | 3 | 4 | 5 | 6 | 7 |
• La summenzionata categoria di rischio si basa sui movimenti percentuali al rialzo o al ribasso registrati in passato dal valore del Fondo. Potrebbe non costituire un’indicazione affidabile circa il profilo di rischio futuro del Fondo.
• La categoria di rischio illustrata non è garantita e potrebbe cambiare nel tempo.
• L’appartenenza alla categoria più bassa non garantisce l’assenza di rischi.
Di seguito sono riportati i rischi principali che potrebbero influenzare i risultati:
• Il valore degli investimenti e il reddito da essi generato aumenteranno e diminuiranno. Di conseguenza, anche il prezzo del fondo e l’eventuale reddito da esso corrisposto saranno soggetti a oscillazioni al rialzo e al ribasso. Non vi è alcuna garanzia che l’obiettivo del fondo verrà realizzato ed è possibile che non si riesca a recuperare l’importo iniziale investito.
• Quando i tassi d’interesse aumentano, il valore del fondo potrebbe diminuire.
• Il valore del fondo potrà diminuire qualora l’emittente di un titolo a reddito fisso detenuto in portafoglio non sia in grado di corrispondere gli interessi previsti o di rimborsare il proprio debito (circostanza nota come insolvenza).
• Il fondo può fare ricorso a strumenti derivati al fine di sfruttare a proprio vantaggio un movimento al rialzo o al ribasso del valore di un determinato attivo (ad esempio le obbligazioni di una società). Tuttavia, se il valore di tale attivo varia in una direzione diversa da quella preventivata, il fondo può subire una perdita.
• Le variazioni dei tassi di cambio influenzeranno il valore dell’investimento.
• Qualora le condizioni di mercato rendessero difficile la vendita degli investimenti del fondo a un prezzo ragionevole per soddisfare le richieste di cessione dei clienti, potremmo sospendere temporaneamente le negoziazioni delle azioni del fondo.
• Alcune operazioni effettuate dal fondo, quale ad esempio il deposito di contanti, richiedono l’impiego di altre istituzioni finanziarie (ad esempio le banche). Se una di queste istituzioni dovesse divenire inadempiente o insolvente, il fondo potrebbe subire una perdita.
180131172102 IT K1 ECBF EUR A IT PE 0002 0000
Una descrizione più dettagliata dei fattori di rischio applicabili al fondo è riportata nel Prospetto del fondo.
Spese
Le spese illustrate nella tabella sono usate per coprire i costi di gestione del fondo,
Risultati ottenuti nel passato
inclusi i costi legati alla sua commercializzazione e distribuzione. Tali spese riducono la crescita potenziale dell’investimento.
%
20,0
15,0
10,0
18,8
13,0
5,4
7,2
Spesa di rimborso 0,00%
La spesa di sottoscrizione è la percentuale massima che può essere prelevata dal capitale prima che venga investito.
3,25%
Spesa di sottoscrizione
Spese una tantum prelevate prima o dopo l’investimento
5,0
1,7
3,8
4,4
3,2
0,0
(1,4)
(5,0)
(10,0)
(4,6)
2008
2009 2010 2011 2012 2013 2014 2015 2016 2017
Fondo
Nessuna
Commissione legata al rendimento
Spese prelevate dal fondo a determinate condizioni specifiche
1,16%
Spese correnti
Spese prelevate dal fondo in un anno
Le spese di sottoscrizione e di rimborso illustrate rappresentano la percentuale massima e in alcuni casi potrebbero essere inferiori. Per maggiori informazioni sulle spese esatte applicabili al proprio investimento, si raccomanda di rivolgersi al proprio consulente finanziario o distributore oppure, se l’investimento è stato effettuato direttamente con noi, di contattarci fornendo i dati riportati nella sezione delle Informazioni pratiche.
Le spese correnti si basano sulle spese dell’esercizio chiuso al 30 giugno 2017. Tale importo può variare da un anno all’altro. Non comprende il costo delle operazioni di portafoglio.
Per le azioni a Distribuzione, le spese correnti vengono prelevate dagli investimenti detenuti dal portafoglio del fondo e non dal reddito prodotto da tali investimenti. Tali spese ridurranno la crescita potenziale dell’investimento effettuato.
• I risultati ottenuti nel passato non costituiscono garanzia di rendimenti futuri.
• Il calcolo dei risultati ottenuti nel passato esclude eventuali imposte britanniche. Non tiene conto delle spese di sottoscrizione e rimborso, ma prende in considerazione le spese correnti, come illustrato nella sezione dedicata alle spese.
• Il Fondo è stato lanciato in data 13 gennaio 2003. La Classe di azioni ad accumulazione di Classe A in EUR è stata lanciata in data 13 gennaio 2003 e la Classe di azioni a distribuzione di Classe A in EUR è stata lanciata in data 12 luglio 2013.
• Il calcolo dei risultati ottenuti nel passato si basa sulle azioni ad accumulazione Classe A in EUR.
La banca depositaria è National Westminster Bank plc.
Per ulteriori informazioni in merito a questo fondo, si rimanda al sito xxx.xxxxxxxxxxx.xx dove è disponibile una copia del Prospetto, dell’Atto costitutivo, dell’ultima Relazione sugli investimenti e del Bilancio annuali o semestrali. I suddetti documenti sono disponibili gratuitamente in lingua inglese. Lo stesso sito fornisce inoltre altre informazioni, incluse le quotazioni azionarie.
Al fondo si applica la legge fiscale britannica e ciò potrebbe influire sulla posizione fiscale personale. Per maggiori informazioni si raccomanda di rivolgersi al proprio consulente finanziario. M&G Securities Limited può essere ritenuta responsabile esclusivamente sulla base delle dichiarazioni contenute nel presente documento che risultano fuorvianti, inesatte o incoerenti rispetto alle corrispondenti parti del Prospetto del fondo.
Il fondo è un Comparto di M&G Investment Funds (3), società di investimento di tipo aperto (OEIC) multicomparto. Il Prospetto informativo, nonché le Relazioni sugli investimenti e i Bilanci annuali o semestrali contengono informazioni su tutti i Comparti di M&G Investment Funds (3).
Per gli attivi di ciascun Comparto all’interno di una OEIC, è prevista la separazione delle responsabilità in base alla legislazione vigente. Di conseguenza, gli attivi apparterranno esclusivamente a quel Comparto e non potranno essere utilizzati o resi disponibili per corrispondere i debiti di qualsivoglia altro Comparto od OEIC.
È possibile effettuare conversioni tra altri Comparti di M&G Investment Funds (3). Potrebbe essere applicata una commissione di sottoscrizione. Per maggiori informazioni sulla conversione (switch) di investimenti, si rimanda al Prospetto consultabile visitando il sito web sopra indicato.
Il fondo può offrire altre classi di azioni specificate nel Prospetto pertinente.
Per informazioni dettagliate sulla politica di remunerazione del personale applicabile ad M&G Securities Limited, ivi comprese una descrizione delle modalità di calcolo delle remunerazioni e delle indennità, la struttura del comitato di remunerazione e le identità dei soggetti responsabili dell’assegnazione di remunerazione e indennità, visitare xxx.xxxxxxxxxxx.xx/xxxxxxxxxxx. Su richiesta, forniremo una copia cartacea gratuita di tali informazioni.
Informazioni pratiche
180131172102 IT K1 ECBF EUR A IT PE 0002 0000
Il Fondo è autorizzato nel Regno Unito e regolamentato dalla Financial Conduct Authority. M&G Securities Limited è autorizzata nel Regno Unito e regolamentata dalla Financial Conduct Authority.
Le informazioni chiave per gli investitori qui riportate sono esatte alla data 9 febbraio 2018.
M&G Global Macro Bond Fund
Classe A-H in EUR – Azioni a distribuzione - Codice ISIN GB00B94CZ541 Classe A-H in EUR – Azioni ad accumulazione - Codice ISIN GB00B78PJC09
Gestito da M&G Securities Limited, parte del Gruppo Prudential
Informazioni chiave per gli investitori
Il presente documento contiene le informazioni chiave per gli investitori in relazione a questo Fondo. Non si tratta di un documento promozionale. Le informazioni contenute nel presente documento, richieste dalla legge, hanno lo scopo di aiutare a capire la natura di questo Fondo e i rischi a esso connessi. Si raccomanda di prenderne visione, in modo da operare una scelta informata in merito all’opportunità di investire.
Obiettivo e politica d’investimento
Il fondo intende fornire reddito e crescita del capitale nell’arco di cinque anni o più.
Investimento core: Almeno il 70% del fondo è investito in obbligazioni, emesse da società e governi di qualunque paese del mondo. Il fondo detiene queste attività direttamente e tramite derivati.
Altri investimenti: Il fondo può inoltre investire in qualunque valuta, nonché in liquidità o attività che a loro volta possono essere trasformate rapidamente in contanti.
Uso dei derivati: È possibile ricorrere ai derivati per investire direttamente in obbligazioni, ridurre i rischi e i costi, nonché per gestire l’impatto dei cambiamenti nei tassi di cambio sugli investimenti del fondo.
Sintesi della strategia: Il fondo è un fondo obbligazionario globale flessibile. Il gestore del fondo seleziona gli investimenti in base a una valutazione dei fattori macroeconomici, come crescita economica, tassi d’interesse e inflazione. Questa analisi stabilisce le aree del mercato obbligazionario globale in cui, a parere del gestore, il fondo dovrebbe investire per conseguire il proprio obiettivo. L’analisi influenza inoltre la successiva selezione delle singole partecipazioni obbligazionarie, nonché le esposizioni valutarie del fondo. Il gestore è coadiuvato nella selezione delle singole obbligazioni da un sub-gestore del fondo e da un team interno di analisti. Il fondo è diversificato poiché investe in un’ampia gamma di obbligazioni dei mercati obbligazionari globali.
Glossario
Obbligazioni: Prestiti a governi e società che corrispondono un interesse.
Derivati: Contratti finanziari il cui valore dipende da altre attività.
Altre informazioni
Il fondo può investire più del 35% in titoli emessi o garantiti da uno Stato membro dello Spazio Economico Europeo o da altri paesi elencati nel Prospetto del fondo. Questo investimento può essere associato all’uso di derivati al fine di perseguire l’obiettivo d’investimento del fondo.
Questo fondo conferisce al gestore la libertà di decidere quali investimenti inserire nel portafoglio.
È possibile acquistare e vendere azioni del fondo in qualsiasi giorno lavorativo. Nel caso degli ordini pervenuti entro le 11:30 (ora dell’Europa centrale), le azioni saranno acquistate al prezzo vigente alla data dell’ordine.
Per i detentori di azioni ad Accumulazione, il reddito derivante dal fondo andrà a incrementare il valore dell’investimento effettuato.
Per i detentori di azioni a Distribuzione, l’eventuale reddito derivante dal fondo sarà versato all’investitore con frequenza trimestrale.
180125201715 IT K1 GLMF EUR AH IT PE 0002 0000
Oltre alle spese specificate nella relativa sezione, il fondo sosterrà i costi delle operazioni di portafoglio che saranno pagati a valere sulle sue attività. Questi possono essere più elevati quando gli investimenti sono effettuati al di fuori dell’Europa.
Profilo di rischio e di rendimento
Xxxxxxx basso Rischio elevato
Rendimenti generalmente inferiori Rendimenti generalmente superiori
1 | 2 | 3 | 4 | 5 | 6 | 7 |
• La summenzionata categoria di rischio si basa sui movimenti percentuali al rialzo o al ribasso registrati in passato dal valore del Fondo. Potrebbe non costituire un’indicazione affidabile circa il profilo di rischio futuro del Fondo.
• La categoria di rischio illustrata non è garantita e potrebbe cambiare nel tempo.
• L’appartenenza alla categoria più bassa non garantisce l’assenza di rischi.
Di seguito sono riportati i rischi principali che potrebbero influenzare i risultati:
• Il valore degli investimenti e il reddito da essi generato aumenteranno e diminuiranno. Di conseguenza, anche il prezzo del fondo e l’eventuale reddito da esso corrisposto saranno soggetti a oscillazioni al rialzo e al ribasso. Non vi è alcuna garanzia che l’obiettivo del fondo verrà realizzato ed è possibile che non si riesca a recuperare l’importo iniziale investito.
• Le variazioni dei tassi di cambio influenzeranno il valore dell’investimento.
• Il fondo può utilizzare strumentiderivati in misura limitata per ottenere un’esposizione agli investimenti superiore al valore del fondo (effetto leva). Ciò potrebbe generare marcate variazioni nel prezzo del fondo e aumentare il rischio di perdite.
• Il fondo può fare ricorso a strumenti derivati al fine di sfruttare a proprio vantaggio un movimento al rialzo o al ribasso del valore di un determinato attivo (ad esempio le obbligazioni di una società). Tuttavia, se il valore di tale attivo varia in una direzione diversa da quella preventivata, il fondo può subire una perdita.
• Il gestore del fondo può ricorrere a strumenti derivati al fine di generare una plusvalenza in caso di aumento dei tassi d’interesse (solitamente, se i tassi d’interesse aumentano, il valore del capitale dei titoli a reddito fisso diminuisce). Tuttavia, in caso di riduzione dei tassi d’interesse, il fondo può subire una perdita.
• Il valore del fondo potrà diminuire qualora l’emittente di un titolo a reddito fisso detenuto in portafoglio non sia in grado di corrispondere gli interessi previsti o di rimborsare il proprio debito (circostanza nota come insolvenza).
• Il fondo investirà su mercati emergenti, i quali, in genere, sono di minori dimensioni e più sensibili a fattori economici e politici, e dove gli investimenti sono acquistati e venduti con minore facilità. In casi eccezionali, il fondo potrebbe trovare difficoltà nel vendere tali investimenti o nel riscuotere il reddito da essi generato, con conseguenti perdite a carico del fondo stesso. In casi eccezionali, ciò potrebbe determinare la sospensione temporanea della negoziazione in azioni del fondo.
• Le classi di azioni coperte intendono replicare le performance di un’altra classe di azioni. Non vi è alcuna garanzia che l’obiettivo di copertura verrà realizzato. La strategia di copertura può limitare i vantaggi ottenibili dai detentori delle classi di azioni coperte in caso di deprezzamento della valuta della classe con copertura rispetto al dollaro USA.
• Qualora le condizioni di mercato rendessero difficile la vendita degli investimenti del fondo a un prezzo ragionevole per soddisfare le richieste di cessione dei clienti, potremmo sospendere temporaneamente le negoziazioni delle azioni del fondo.
• Alcune operazioni effettuate dal fondo, quale ad esempio il deposito di contanti, richiedono l’impiego di altre istituzioni finanziarie (ad esempio le banche). Se una di queste istituzioni dovesse divenire inadempiente o insolvente, il fondo potrebbe subire una perdita.
Una descrizione più dettagliata dei fattori di rischio applicabili al fondo è riportata nel Prospetto del fondo.
Spese
Le spese illustrate nella tabella sono usate per coprire i costi di gestione del fondo, inclusi i costi legati alla sua commercializzazione e distribuzione. Tali spese riducono la crescita potenziale dell’investimento.
Risultati ottenuti nel passato
%
6,5
5,0
(1,0)
2,7
2,3
8,0
6,0
4,0
2,0
0,0
(2,0)
(4,0)
(6,0) (4,7)
1,43%
Spese correnti
Spese prelevate dal fondo in un anno
Spesa di rimborso 0,00%
La spesa di sottoscrizione è la percentuale massima che può essere prelevata dal capitale prima che venga investito.
4,00%
Spesa di sottoscrizione
Spese una tantum prelevate prima o dopo l’investimento
2008
Fondo
2009 2010 2011 2012 2013 2014 2015 2016 2017
Nessuna
Commissione legata al rendimento
Spese prelevate dal fondo a determinate condizioni specifiche
Le spese di sottoscrizione e di rimborso illustrate rappresentano la percentuale massima e in alcuni casi potrebbero essere inferiori. Per maggiori informazioni sulle spese esatte applicabili al proprio investimento, si raccomanda di rivolgersi al proprio consulente finanziario o distributore oppure, se l’investimento è stato effettuato direttamente con noi, di contattarci fornendo i dati riportati nella sezione delle Informazioni pratiche.
Le spese correnti si basano sulle spese dell’esercizio chiuso al 31 ottobre 2017. Tale importo può variare da un anno all’altro. Non comprende il costo delle operazioni di portafoglio.
Per le azioni a Distribuzione, le spese correnti vengono prelevate dagli investimenti detenuti dal portafoglio del fondo e non dal reddito prodotto da tali investimenti. Tali spese ridurranno la crescita potenziale dell’investimento effettuato.
• I risultati ottenuti nel passato non costituiscono garanzia di rendimenti futuri.
• Il calcolo dei risultati ottenuti nel passato esclude eventuali imposte britanniche. Non tiene conto delle spese di sottoscrizione e rimborso, ma prende in considerazione le spese correnti, come illustrato nella sezione dedicata alle spese.
• Il Fondo è stato lanciato in data 15 ottobre 1999. La Classe di azioni ad accumulazione di Classe A-H in EUR è stata lanciata in data 16 dicembre 2011 e la Classe di azioni a distribuzione di Classe A-H in EUR è stata lanciata in data 12 luglio 2013.
• Il calcolo dei risultati ottenuti nel passato si basa sulle azioni ad accumulazione Classe A-H in EUR.
La banca depositaria è National Westminster Bank plc.
Per ulteriori informazioni in merito a questo fondo, si rimanda al sito xxx.xxxxxxxxxxx.xx dove è disponibile una copia del Prospetto, dell’Atto costitutivo, dell’ultima Relazione sugli investimenti e del Bilancio annuali o semestrali. I suddetti documenti sono disponibili gratuitamente in lingua inglese. Lo stesso sito fornisce inoltre altre informazioni, incluse le quotazioni azionarie.
Al fondo si applica la legge fiscale britannica e ciò potrebbe influire sulla posizione fiscale personale. Per maggiori informazioni si raccomanda di rivolgersi al proprio consulente finanziario. M&G Securities Limited può essere ritenuta responsabile esclusivamente sulla base delle dichiarazioni contenute nel presente documento che risultano fuorvianti, inesatte o incoerenti rispetto alle corrispondenti parti del Prospetto del fondo.
Il fondo può offrire altre classi di azioni specificate nel Prospetto pertinente.
Per informazioni dettagliate sulla politica di remunerazione del personale applicabile ad M&G Securities Limited, ivi comprese una descrizione delle modalità di calcolo delle remunerazioni e delle indennità, la struttura del comitato di remunerazione e le identità dei soggetti responsabili dell’assegnazione di remunerazione e indennità, visitare xxx.xxxxxxxxxxx.xx/xxxxxxxxxxx. Su richiesta, forniremo una copia cartacea gratuita di tali informazioni.
Informazioni pratiche
180125201715 IT K1 GLMF EUR AH IT PE 0002 0000
Il Fondo è autorizzato nel Regno Unito e regolamentato dalla Financial Conduct Authority. M&G Securities Limited è autorizzata nel Regno Unito e regolamentata dalla Financial Conduct Authority.
Le informazioni chiave per gli investitori qui riportate sono esatte alla data 9 febbraio 2018.
M&G Global Floating Rate High Yield Fund
un comparto di M&G Investment Funds (7)
Classe A-H in EUR – Azioni a distribuzione - Codice ISIN GB00BMP3SG99 Classe A-H in EUR – Azioni ad accumulazione - Codice ISIN GB00BMP3SF82
Gestito da M&G Securities Limited, parte del Gruppo Prudential
Informazioni chiave per gli investitori
Il presente documento contiene le informazioni chiave per gli investitori in relazione a questo Fondo. Non si tratta di un documento promozionale. Le informazioni contenute nel presente documento, richieste dalla legge, hanno lo scopo di aiutare a capire la natura di questo Fondo e i rischi a esso connessi. Si raccomanda di prenderne visione, in modo da operare una scelta informata in merito all’opportunità di investire.
Obiettivo e politica d’investimento
Il fondo intende accrescere il capitale e fornire reddito.
Investimento core: Solitamente circa il 70% del fondo è investito in floating rate note (FRN) ad alto rendimento emesse da società di qualunque paese del mondo. Le FRN sono detenute direttamente e indirettamente tramite una combinazione di derivati e obbligazioni governative. Il fondo investe anche in titoli garantiti da attività.
Altri investimenti: Il fondo possiede anche altre attività, comprese obbligazioni emesse da governi e liquidità.
Uso dei derivati: È possibile ricorrere ai derivati per ottenere esposizione agli Investimento core e agli altri investimenti, ridurre il rischio e i costi, nonché per gestire l’impatto dei cambiamenti nei tassi di cambio sugli investimenti del fondo.
Sintesi della strategia: Il fondo è concepito per generare reddito e minimizzare al contempo l’impatto negativo dell’aumento dei tassi d’interesse, investendo principalmente in FRN. Il fondo si concentra su FRN emesse da società con un rating di credito basso, che corrispondono solitamente un livello di interesse più elevato per ricompensare gli investitori del maggiore rischio di insolvenza. Parte del fondo può essere investita in altre attività a reddito fisso, come obbligazioni governative. La diversificazione degli investimenti fra emittenti, settori e paesi è un elemento essenziale della strategia del fondo e il gestore è coadiuvato nella selezione delle singole obbligazioni da un team interno di analisti del credito.
Misurazione delle performance: Il fondo viene gestito attivamente. L’Indice ICE BofAML Global Floating Rate High Yield (3% constrained) rappresenta un riferimento per valutare le performance del fondo.
Glossario
Titoli garantiti da attività: Obbligazioni garantite da attività che producono flussi di cassa, come mutui ipotecari, prestiti su carte di credito e prestiti automatici.
Obbligazioni: Prestiti a governi e società che corrispondono un interesse.
Derivati: Contratti finanziari il cui valore dipende da altre attività.
Floating rate note (FRN): Un tipo di obbligazione per la quale i pagamenti dell’interesse, o cedole, vengono adeguati in base alle oscillazioni dei tassi d’interesse.
Obbligazioni ad alto rendimento: Obbligazioni emesse da società considerate più rischiose e, pertanto, che corrispondono di norma un livello di interesse più elevato.
Altre informazioni
Il fondo può investire più del 35% in titoli emessi o garantiti da uno Stato membro dello Spazio Economico Europeo o da altri paesi elencati nel Prospetto del fondo. Questo investimento può essere associato all’uso di derivati al fine di perseguire l’obiettivo d’investimento del fondo.
Questo fondo conferisce al gestore la libertà di decidere quali investimenti inserire nel portafoglio.
È possibile acquistare e vendere azioni del fondo in qualsiasi giorno lavorativo. Nel caso degli ordini pervenuti entro le 11:30 (ora dell’Europa centrale), le azioni saranno acquistate al prezzo vigente alla data dell’ordine.
Per i detentori di azioni ad Accumulazione, il reddito derivante dal fondo andrà a incrementare il valore dell’investimento effettuato.
Per i detentori di azioni a Distribuzione, l’eventuale reddito derivante dal fondo sarà versato all’investitore con frequenza trimestrale.
180202193659 IT K1 GFLO EUR AH IT PE 0002 0000
Oltre alle spese specificate nella relativa sezione, il fondo sosterrà i costi delle operazioni di portafoglio che saranno pagati a valere sulle sue attività. Questi possono essere più elevati quando gli investimenti sono effettuati al di fuori dell’Europa.
Profilo di rischio e di rendimento
Xxxxxxx basso Rischio elevato
Rendimenti generalmente inferiori Rendimenti generalmente superiori
1 | 2 | 3 | 4 | 5 | 6 | 7 |
• La summenzionata categoria di rischio si basa su dati storici simulati e pertanto potrebbe non costituire un’indicazione affidabile circa il profilo di rischio futuro del Fondo.
• La categoria di rischio illustrata non è garantita e potrebbe cambiare nel tempo.
• L’appartenenza alla categoria più bassa non garantisce l’assenza di rischi.
Di seguito sono riportati i rischi principali che potrebbero influenzare i risultati:
• Il valore degli investimenti e il reddito da essi generato aumenteranno e diminuiranno. Di conseguenza, anche il prezzo del fondo e l’eventuale reddito da esso corrisposto saranno soggetti a oscillazioni al rialzo e al ribasso. Non vi è alcuna garanzia che l’obiettivo del fondo verrà realizzato ed è possibile che non si riesca a recuperare l’importo iniziale investito.
• Il valore del fondo potrà diminuire qualora l’emittente di un titolo a reddito fisso detenuto in portafoglio non sia in grado di corrispondere gli interessi previsti o di rimborsare il proprio debito (circostanza nota come insolvenza).
• Il fondo può fare ricorso a strumenti derivati al fine di sfruttare a proprio vantaggio un movimento al rialzo o al ribasso del valore di un determinato attivo (ad esempio le obbligazioni di una società). Tuttavia, se il valore di tale attivo varia in una direzione diversa da quella preventivata, il fondo può subire una perdita.
• Il fondo investe principalmente in una tipologia di attività. Tale tipologia di fondo può comportare variazioni dei prezzi superiori alla media rispetto a un fondo con un universo d’investimento più ampio.
• Le variazioni dei tassi di cambio influenzeranno il valore dell’investimento.
• Le classi di azioni coperte intendono replicare le performance di un’altra classe di azioni. Non vi è alcuna garanzia che l’obiettivo di copertura verrà realizzato. La strategia di copertura può limitare i vantaggi ottenibili dai detentori delle classi di azioni coperte in caso di deprezzamento della valuta della classe con copertura rispetto al dollaro USA.
• Il fondo investirà su mercati emergenti, i quali, in genere, sono di minori dimensioni e più sensibili a fattori economici e politici, e dove gli investimenti sono acquistati e venduti con minore facilità. In casi eccezionali, il fondo potrebbe trovare difficoltà nel vendere tali investimenti o nel riscuotere il reddito da essi generato, con conseguenti perdite a carico del fondo stesso. In casi eccezionali, ciò potrebbe determinare la sospensione temporanea della negoziazione in azioni del fondo.
• Quando i tassi d’interesse aumentano, il valore del fondo potrebbe diminuire.
• Qualora le condizioni di mercato rendessero difficile la vendita degli investimenti del fondo a un prezzo ragionevole per soddisfare le richieste di cessione dei clienti, potremmo sospendere temporaneamente le negoziazioni delle azioni del fondo.
• Alcune operazioni effettuate dal fondo, quale ad esempio il deposito di contanti, richiedono l’impiego di altre istituzioni finanziarie (ad esempio le banche). Se una di queste istituzioni dovesse divenire inadempiente o insolvente, il fondo potrebbe subire una perdita.
Una descrizione più dettagliata dei fattori di rischio applicabili al fondo è riportata nel Prospetto del fondo.
Spese
Le spese illustrate nella tabella sono usate per coprire i costi di gestione del fondo, inclusi i costi legati alla sua commercializzazione e distribuzione. Tali spese riducono la crescita potenziale dell’investimento.
Risultati ottenuti nel passato
11,1
%
12,0
10,0
6,5
8,0
6,0
1,6
2,7
4,0
2,0
(0,4)
(0,7)
0,0
(2,0)
1,43%
Spese correnti
Spese prelevate dal fondo in un anno
Spesa di rimborso 0,00%
La spesa di sottoscrizione è la percentuale massima che può essere prelevata dal capitale prima che venga investito.
4,00%
Spesa di sottoscrizione
Spese una tantum prelevate prima o dopo l’investimento
2013
Fondo
2014 2015 2016 2017
Indice comparativo
Nessuna
Commissione legata al rendimento
Spese prelevate dal fondo a determinate condizioni specifiche
Le spese di sottoscrizione e di rimborso illustrate rappresentano la percentuale massima e in alcuni casi potrebbero essere inferiori. Per maggiori informazioni sulle spese esatte applicabili al proprio investimento, si raccomanda di rivolgersi al proprio consulente finanziario o distributore oppure, se l’investimento è stato effettuato direttamente con noi, di contattarci fornendo i dati riportati nella sezione delle Informazioni pratiche.
Le spese correnti si basano sulle spese dell’esercizio chiuso al 31 luglio 2017. Tale importo può variare da un anno all’altro. Non comprende il costo delle operazioni di portafoglio.
Per le azioni a Distribuzione, le spese correnti vengono prelevate dagli investimenti detenuti dal portafoglio del fondo e non dal reddito prodotto da tali investimenti. Tali spese ridurranno la crescita potenziale dell’investimento effettuato.
• I risultati ottenuti nel passato non costituiscono garanzia di rendimenti futuri.
• Il calcolo dei risultati ottenuti nel passato esclude eventuali imposte britanniche. Non tiene conto delle spese di sottoscrizione e rimborso, ma prende in considerazione le spese correnti, come illustrato nella sezione dedicata alle spese.
• Il Fondo è stato lanciato in data 11 settembre 2014. La Classe di azioni ad accumulazione di Classe A-H in EUR e la Classe di azioni a distribuzione di Classe A-H in EUR sono state lanciate in data 11 settembre 2014.
• Il calcolo dei risultati ottenuti nel passato si basa sulle azioni ad accumulazione Classe A-H in EUR.
Indice comparativo:
1 gennaio 2015 a 31 marzo 2016 - ICE BofAML Global Floating Rate High Yield Index 1 aprile 2016 a 31 dicembre 2017 - ICE BofAML Global Floating Rate High Yield 3% Constrained Index
La banca depositaria è National Westminster Bank plc.
Per ulteriori informazioni in merito a questo fondo, si rimanda al sito xxx.xxxxxxxxxxx.xx dove è disponibile una copia del Prospetto, dell’Atto costitutivo, dell’ultima Relazione sugli investimenti e del Bilancio annuali o semestrali. I suddetti documenti sono disponibili gratuitamente in lingua inglese. Lo stesso sito fornisce inoltre altre informazioni, incluse le quotazioni azionarie.
Al fondo si applica la legge fiscale britannica e ciò potrebbe influire sulla posizione fiscale personale. Per maggiori informazioni si raccomanda di rivolgersi al proprio consulente finanziario. M&G Securities Limited può essere ritenuta responsabile esclusivamente sulla base delle dichiarazioni contenute nel presente documento che risultano fuorvianti, inesatte o incoerenti rispetto alle corrispondenti parti del Prospetto del fondo.
Il fondo è un Comparto di M&G Investment Funds (7), società di investimento di tipo aperto (OEIC) multicomparto. Il Prospetto informativo, nonché le Relazioni sugli investimenti e i Bilanci annuali o semestrali contengono informazioni su tutti i Comparti di M&G Investment Funds (7).
Per gli attivi di ciascun Comparto all’interno di una OEIC, è prevista la separazione delle responsabilità in base alla legislazione vigente. Di conseguenza, gli attivi apparterranno esclusivamente a quel Comparto e non potranno essere utilizzati o resi disponibili per corrispondere i debiti di qualsivoglia altro Comparto od OEIC.
È possibile effettuare conversioni tra altri Comparti di M&G Investment Funds (7). Potrebbe essere applicata una commissione di sottoscrizione. Per maggiori informazioni sulla conversione (switch) di investimenti, si rimanda al Prospetto consultabile visitando il sito web sopra indicato.
Il fondo può offrire altre classi di azioni specificate nel Prospetto pertinente.
Per informazioni dettagliate sulla politica di remunerazione del personale applicabile ad M&G Securities Limited, ivi comprese una descrizione delle modalità di calcolo delle remunerazioni e delle indennità, la struttura del comitato di remunerazione e le identità dei soggetti responsabili dell’assegnazione di remunerazione e indennità, visitare xxx.xxxxxxxxxxx.xx/xxxxxxxxxxx. Su richiesta, forniremo una copia cartacea gratuita di tali informazioni.
Informazioni pratiche
180202193659 IT K1 GFLO EUR AH IT PE 0002 0000
Il Fondo è autorizzato nel Regno Unito e regolamentato dalla Financial Conduct Authority. M&G Securities Limited è autorizzata nel Regno Unito e regolamentata dalla Financial Conduct Authority.
Le informazioni chiave per gli investitori qui riportate sono esatte alla data 9 febbraio 2018.
M&G Investment Funds (3)
Issued by M&G Securities Limited 30 January 2018
Prospectus
M&G Investment Funds (3)
This document constitutes the Prospectus for M&G INVESTMENT FUNDS
(3) (the ‘Company’) which has been prepared in accordance with the Open- Ended Investment Companies Regulations 2001 and the rules contained in the Collective Investment Schemes Sourcebook published by the FCA as part of its Handbook of Rules and Guidance.
The Prospectus is dated and is valid as at 30 January 2018.
Copies of this Prospectus have been sent to the Financial Conduct Authority and National Westminster Bank Plc as Depositary.
The Prospectus is based on information, law and practice at the date hereof but where it refers to any statutory provision or regulation this includes any modification or re-enactment that has been made. The Company is not bound by any out of date prospectus when it has issued a new prospectus and potential investors should check that they have the most recently published prospectus.
M&G Securities Limited, the Authorised Corporate Director of the Company, is the person responsible for the information contained in this Prospectus. To the best of its knowledge and belief (having taken all reasonable care to ensure that such is the case) the information contained herein does not contain any untrue or misleading statement or omit any matters required by Regulations to be included in it. M&G Securities Limited accepts responsibility accordingly. No person has been authorised by the Company to give any information or to make any representations in connection with the offering of Shares other than those contained in the Prospectus and, if given or made, such information or representations must not be relied on as having been made by the Company. The delivery of this Prospectus (whether or not accompanied by any reports) or the issue of Shares shall not, under any circumstances, create any implication that the affairs of the Company have not changed since the date hereof.
The distribution of this Prospectus and the offering of Shares in certain jurisdictions may be restricted. Persons into whose possession this Prospectus comes are required by the Company to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.
Warning: the contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to this offer. If you are in any doubt about the contents of this document you should obtain independent professional advice. In particular, no interest in the Company will be issued to any person other than the person to whom this document is addressed. In addition, (a) no offer or invitation to subscribe for Shares in the Company may be made to the public in Hong Kong; and (b) this document has not been approved by the Securities and Futures Commission in Hong Kong or any other regulatory authority in Hong Kong and accordingly interests in the Company may not be offered or sold in Hong Kong by means of this document, other than in circumstances which do not constitute an offer to the public for the purposes of the Hong Kong Companies Ordinance and the Hong Kong Securities and Futures Ordinance, as amended from time to time. Shares in the Company are not listed on any investment exchange.
Potential investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters and are recommended to consult their own professional advisers concerning the acquisition, holding or disposal of Shares.
The provisions of the Instrument of Incorporation are binding on each of its Shareholders (who are taken to have notice of them).
This Prospectus has been approved for the purpose of section 21(1) of the Financial Services and Xxxxxxx Xxx 0000 by M&G Securities Limited.
The Depositary is not a person responsible for the information contained in this Prospectus and accordingly does not accept any responsibility therefore under the Regulations or otherwise.
If you are in any doubt about the contents of this Prospectus you should consult your professional adviser.
Definitions 4
Operating Structure and Details 6
1 The Company 6
2 Company structure 6
3 Shares 6
4 Management and Administration 7
5 The Depositary 7
6 The Investment Manager 8
7 Administrator and Registrar 8
8 The Auditor 8
9 Register of Shareholders 9
10 Fund Accounting and Pricing 9
11 Collateral Management 9
12 Buying Shares and Selling Shares – General Information 9
13 Buying and selling Shares on the main register of Shareholders 10
14 Buying and selling Shares via a Group Plan 10
15 Switching and converting shares 11
16 Dealing charges 12
17 Other dealing information 13
18 Money laundering 14
19 Restrictions on dealing 14
20 Suspension of dealings in the Company 14
21 Governing law 14
22 Valuation of the Company 15
23 Calculation of the Net Asset Value 15
24 Price per share in each Sub-fund and each class 15
25 Pricing basis 16
26 Publication of prices 16
27 Risk Factors 16
28 Charges and Expenses 16
29 Stock lending 18
30 Shareholder meetings and voting rights 18
31 Taxation 18
32 Income equalisation 19
33 Winding up of the Company or a Sub-fund of the Company 19
34 General Information 20
35 Complaints 22
36 Preferential Treatment 22
37 Tax Reporting 22
38 Marketing outside the UK 22
39 Markets for the Sub-funds 23
40 Genuine diversity of ownership 23
41 Remuneration policy 23
42 Risk factors 24
Appendix 1 – 30
Details of the sub-funds of M&G Investment Funds (3)
Appendix 2 – 44
Investment Management and Borrowing Powers of the Company
Appendix 3 – 55
Eligible Markets
Appendix 4 – 56
Information on non-sterling Share Classes
Appendix 5 – 71
Sterling Performance Bar Charts
Appendix 5a – 73
Euro Performance Bar Charts
Appendix 5b – 74
U.S. Dollar Performance Bar Charts
Appendix 5c – 75
Swiss Franc Performance Bar Charts
Appendix 6 – 76
List of Sub-Custodians
Directory 78
UK Customer Helpline: 0800 390 390
Definitions
M&G Investment Funds (3)
Accumulation Share: a share in the Company in respect of which income allocated thereto is credited periodically to capital pursuant to the Regulations;
ACD: M&G Securities Limited, the Authorised Corporate Director of the Company;
ACD Agreement: The agreement to be entered into between the Company and the ACD authorising the ACD to manage the affairs of the Company;
Approved Bank in relation to a bank account opened by the Company:
(a) if the account is opened at a branch in the United Kingdom;
(i) the Bank of England; or
(ii) the central bank of a member state of the OECD; or
(iii) a bank or a building society; or
(iv) a bank which is supervised by the central bank or other banking regulator of a member state of the OECD; or
(b) if the account is opened elsewhere:
(i) a bank in (a); or
(ii) a credit institution established in an EEA State other than in the United Kingdom and duly authorised by the relevant Home State Regulator; or
(iii) a bank which is regulated in the Isle of Man or the Channel Islands; or
(c) a bank supervised by the South African Reserve Bank; or
(d) any other bank that:
(i) is subject to regulation by a national banking regulator;
(ii) is required to provide audited accounts;
(iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time) and has a surplus revenue over expenditure for the last two financial years; and,
(iv) has an annual audit report which is not materially qualified.
Associate: an associate in accordance with the FCA Handbook of Rules and Guidance;
Base Currency: in relation to the Company the base currency is Pounds Sterling;
BCD Credit Institution: a credit institution under the Banking Consolidation Directive;
Class or Classes: in relation to Shares, means (according to the context) all of the Shares related to a single Sub-fund or a particular class or classes of Share related to a single Sub-fund;
Client Account: A bank account held by us in accordance with the FCA Handbook of Rules and Guidance;
COLL: refers to the appropriate chapter or rule in the COLL Sourcebook issued by the FCA as amended or re-enacted from time to time;
Company: M&G Investment Funds (3);
Dealing Day: Monday to Friday except for bank holidays in England and Wales and other days at the ACD’s discretion;
Depositary: National Westminster Bank Plc, the depositary of the Company;
Eligible Counterparty: a client that is either a per se eligible counterparty or an elective eligible counterparty as defined by the FCA Handbook of Rules and Guidance;
Efficient Portfolio Management: means the use of techniques and instruments which relate to transferable securities and approved money- market instruments and which fulfil the following criteria:
(a) they are economically appropriate in that they are realised in a cost effective way; and
(b) they are entered into for one or more of the following specific aims:
- reduction of risk;
- reduction of cost;
- generation of additional capital or income for the scheme with a risk level which is consistent with the risk profile of the scheme and the risk diversification rules laid down in COLL
Eligible Institution: one of certain eligible institutions being a BCD credit institution authorised by its home state regulator or an Investment Firm authorised by its home state regulator as defined in the glossary of definitions in the FCA Handbook;
Fraction: a smaller denomination share (on the basis that one thousand smaller denomination shares make one larger denomination share);
FCA: the Financial Conduct Authority;
Group Plan: one or more of The M&G ISA, The M&G Junior ISA and The M&G Savings Plan, and the M&G Securities International Nominee Service as the context may require;
Instrument of Incorporation: the instrument of incorporation of the Company as amended from time to time;
Intermediate Unitholder: a firm whose name is entered in the register of a Sub-fund, or which holds Shares indirectly through a third party acting as a nominee, and which:
(a) is not the beneficial owner of the relevant Share; and
(b) does not manage investments on behalf of the relevant beneficial owner of the Share; or
(c) does not act as a depositary of a collective investment scheme or on behalf of such a depositary in connection with its role in holding property subject to the scheme;
Investment Manager: one or more of the companies appointed as the investment manager by the ACD shown in section 6, as the context may require;
Investment Firm: an investment firm that provides investment services as defined in the glossary of definitions in the FCA handbook;
M&G OEIC: M&G Investment Funds (1), M&G Investment Funds (2), M&G Investment Funds (3), M&G Investment Funds (4), M&G Investment Funds (5), M&G Investment Funds (7), M&G Investment Funds (9), M&G Investment Funds (10), M&G Investment Funds (11), M&G Investment Funds (12), M&G Investment Funds (14), M&G Global Dividend Fund, M&G Dynamic Allocation Fund, M&G Global Macro Bond Fund, M&G Optimal Income Fund, M&G Property Portfolio, M&G Strategic Corporate Bond Fund or any other open-ended investment company with variable capital incorporated in England and Wales and managed by the ACD;
M&G Securities International Nominee Service: a group plan offered by the ACD designed to facilitate investment from outside the UK;
mainly: within an investment objective, an amount greater than 70%;
Member State: those countries which are members of the European Union or the European Economic Area at any given time;
Net Asset Value or NAV: the value of the scheme property of the Company (or of any Sub-fund as the context requires) less the liabilities of the Company (or of the Sub-fund concerned) as calculated in accordance with the Company’s Instrument of Incorporation;
Ongoing Charges Figure: a percentage figure representing the actual cost of running the fund, see also Section 28;
Primarily: within an investment objective, at least 80% of the portfolio;
predominantly: within an investment objective, at least 80% of the portfolio;
The M&G ISA: an Individual Savings Account the manager of which is the ACD;
The M&G Junior ISA: a Junior Individual Savings Account the manager of which is the ACD;
The M&G Savings Plan: a group plan offered by the ACD designed to facilitate regular savings by Direct Debit in the UK;
Definitions
M&G Investment Funds (3)
the Regulations: the Open-Ended Investment Companies Regulations 2001 and the rules contained in the Collective Investment Schemes Sourcebook published by the FCA as part of its Handbook of Rules and Guidance;
scheme property: the property of the Company to be given to the Depositary for safekeeping, as required by the Regulations;
Share or Shares: a share or shares in the Company (including larger denomination Shares and fractions), or where appropriate a share or shares in any other M&G OEIC;
Shareholder: a holder of registered or bearer shares in the Company;
Sub-fund: a Sub-fund of the Company (bearing part of the scheme property of the Company which is pooled separately) and to which specific assets and liabilities of the Company may be allocated and which is invested in accordance with the investment objective applicable to that Sub-fund;
switch: the exchange of Shares of one Class or Sub-fund for Shares of another Class or Sub-fund of any M&G OEIC;
Valuation Currency: the currency in which a fund is valued, being the currency noted for each fund in Appendices 1 and 4;
XD date: the XD (or Ex-Dividend) date is the date on which the income is removed from the price of an Income Share pending the payment of a distribution.
Operating Structure and Details
1 The Company
1.1 M&G INVESTMENT FUNDS (3) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC 117 and authorised by the Financial Conduct Authority with effect from 8 August 2001. The Company has been established for an unlimited duration.
The Company has been certified by the FCA as complying with the conditions necessary for it to enjoy the rights conferred by the EC Directive on undertakings for collective investment in transferable securities (‘UCITS’).
1.2 The Head Office of the Company is at Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX and is also the address of the place in the United Kingdom for service on the Company of notices or other documents required or authorised to be served on it. The Company does not have any interest in immovable property or any tangible moveable property.
1.3 The Base Currency of the Company is Pounds Sterling.
1.4 The maximum share capital of the Company is currently
£250,000,000,000 and the minimum is £100. Shares in the Company have no par value and therefore the share capital of the Company at all times equals the Company’s current Net Asset Value.
1.5 Shareholders in the Company are not liable for the debts of the Company (see also section 42- Risk Factors).
1.6 The Company has been established as an ‘umbrella company’ (as defined in the Regulations) and therefore different Sub-funds may be formed by the ACD, subject to approval from the FCA. On the establishment of a new Sub-fund or share class an updated prospectus will be prepared setting out the relevant information concerning the new Sub-fund or share class.
2 Company structure
2.1 The Company is an umbrella company. The assets of each Sub- fund are treated as separate from those of every other Sub-fund and will be invested in accordance with that Sub-fund’s own investment objective and policy.
2.2 At present, there are 9 Sub-funds, which are available for investment:
M&G Corporate Bond Fund, M&G Dividend Fund,
M&G Emerging Markets Bond Fund, M&G European Corporate Bond Fund, M&G European High Yield Bond Fund, M&G Fund of Investment Trust Shares, M&G Global Government Bond Fund, M&G Recovery Fund,
M&G Smaller Companies Fund.
These Sub-funds are all UCITS schemes within the meaning of the Regulations.
2.3 The investment objective, investment policy and other details of each Sub-fund are set out in Appendices 1 and 4. The investment and borrowing powers under the Regulations applicable to each Sub-fund are set out in Appendix 2 and the eligible securities and derivatives markets on which the Sub-funds can invest are set out in Appendix 3.
2.4 When there is more than one Sub-fund in issue, each Sub-fund has a specific portfolio of assets and investments to which each Sub- fund’s assets and liabilities are attributable and investors should view each Sub-fund as a separate investment entity.
2.5 The Sub-funds are segregated portfolios of assets and, accordingly, the assets of a Sub-fund belong exclusively to that Sub-fund and shall not be made available to discharge (directly or indirectly) the liabilities of, or claims against, any other person or body, including the Company or any other Sub-fund and shall not be available for any such purpose.
2.6 Shareholders in the Company are not liable for the debts of the Company or any Sub-fund in the Company (see also section 42- Risk Factors).
2.7 Subject to the above, each Sub-fund will be charged with the liabilities, expenses, costs and charges of the Company attributable to that Sub-fund and within the Sub-funds charges will be allocated between share classes in accordance with the terms of issue of those share classes.
2.8 Any assets, liabilities, expenses, costs or charges not attributable to a particular Sub-fund may be allocated by the ACD in a manner which is fair to Shareholders as a whole but they will normally be allocated to all Sub-funds pro rata to the value of the net assets of the relevant Sub-funds.
3 Shares
3.1 Classes of Share within the Sub-funds
3.1.1 Several share classes may be issued in respect of a Sub- fund. The share classes in issue, or available for issue, for each Sub-fund are shown in Appendices 1 and 4.
The UK Government announced changes to tax law which removed the requirement to deduct tax on interest from UK Open-Ended Investment Companies from April 2017. This change is expected to be enacted in Finance Bill 2017. The Company has ceased to account for tax on net classes for distribution after this date.
3.1.2 Any Sub-fund may make available such further classes of Share as the ACD may decide.
3.1.3 Shareholders should note that the ACD issues hedged Share Classes. Share class hedging activity does not form part of the investment strategy of a Sub-fund but is designed to reduce exchange rate fluctuations between the currency of the hedged Share Class and the Valuation Currency of the Sub-fund. All costs associated with operating hedging transactions for these Share Classes will be borne by Shareholders of these Share Classes.
Forward currency contracts, or other instruments that may achieve a similar result, will be used to hedge the total return (capital and revenue) of Share Classes which are not denominated in the Sub-fund’s Valuation Currency thereby reducing exposure to movements in rates of currency exchange between the currency of the Share Classes and the Valuation Currency of the Sub-fund.
The hedging position will be reviewed on each day and adjusted when there is a material change, for example, to the dealing volume of Shares in hedged Share Classes and/or following asset allocation decisions by the Investment Manager.
3.1.4 Holders of Income Shares are entitled to be paid the income attributed to such Shares on the relevant interim and annual allocation dates net of tax. The price of such Shares immediately after the end of the relevant accounting period reduces to reflect these allocations of income.
3.1.5 Holders of Accumulation Shares are not entitled to be paid the income attributable to such Shares but that income is
automatically transferred to (and retained as part of) the capital assets of the relevant Sub-fund immediately after the relevant interim and / or annual accounting dates. The price of such Shares continues to reflect this retention of the income entitlement, which will be transferred after deduction of applicable tax.
3.1.6 Where a Sub-fund has different classes of Share available, each class may attract different charges and expenses and so monies may be deducted from classes in unequal proportions. For this and like reasons, the proportionate interests of the classes within a Sub-fund will vary from time to time.
3.1.7 When different Sub-funds are available, Shareholders will be entitled (subject to certain restrictions) to switch all or some of their Shares in a Sub-fund for Shares within a different Sub-fund or a different M&G OEIC. Details of this switching facility and the restrictions are set out in section 15 of this document.
3.1.8 Holders of Income Shares may convert all or some of their Shares to Accumulation Shares of the same Class in the same Sub-fund, and holders of Accumulation Shares may convert all or some of their Shares to Income Shares of the same Class in the same Sub-fund. Details of this conversion facility are set out in paragraph 15.2 of this document.
3.1.9 Sterling Class ‘C’ Shares are available only to a company which the ACD deems to be an associate company or to other collective investment schemes managed by the ACD or a company which the ACD deems to be an associate company.
3.1.10 Sterling Class R Shares are available only to Intermediate Unitholders or where the deal has been arranged by a financial adviser.
3.1.11 Not all share classes listed in Appendices 1 and 4 may currently be in issue. Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued by which Sub-funds.
3.1.12 Where a Sub-fund does not currently issue a share class listed for it in Appendices 1 and 4, the ACD may be willing to arrange for it to be issued once it has secured commitments from potential customers to purchase no less than a total of £20million-worth of that share class. The ACD will require at least eight-weeks’ notice before being able to issue such a share class.
4 Management and Administration
4.1 Authorised Corporate Director
4.1.1 The Authorised Corporate Director of the Company is M&G Securities Limited which is a private company limited by shares incorporated in England and Wales under the Companies Acts 1862 to 1900 on 12 November 1906. The ultimate holding company of the ACD is Prudential plc, a company incorporated in England and Wales. The FCA reference number for M&G Securities Limited is 122057.
4.1.2 Registered Office and Head Office: Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, XX0X 0XX. Share Capital:
Authorised £100,000 Issued and paid-up £100,000
Directors:
Mr Xxxx Xxxxxx,
Mr Xxxxxx XxxXxxxxx, Mr Xxxxxxxx Xxxxxxx, Mr Xxxxxx Xxxxx,
Mr Xxxx Xxxxxxxx.
All of the directors have significant business activities which are not connected to those of the ACD but of other companies within the M&G Group.
4.1.3 The ACD is responsible for managing and administering the Company’s affairs in compliance with the Regulations. Other companies for which the ACD has these responsibilities are M&G Investment Funds (1), M&G Investment Funds (2), M&G Investment Funds (4), M&G Investment Funds (5), M&G Investment Funds (7), M&G Investment Funds (9), M&G Investment Funds (10), M&G Investment Funds (11), M&G Investment Funds (12), M&G Investment Funds (14), M&G Global Dividend Fund, M&G Dynamic Allocation Fund, M&G Global Macro Bond Fund, M&G Optimal Income Fund, M&G Property Portfolio, M&G Feeder of Property Portfolio and M&G Strategic Corporate Bond Fund. The ACD is also the Manager of the M&G Feeder of Property Portfolio and the managing agent for The Equities Investment Fund for Charities, The Charibond Charities Fixed Interest Common Investment Fund, and The National Association of Almshouses Common Investment Fund.
4.2 Terms of Appointment
4.2.1 The ACD Agreement provides that the appointment of the ACD is for an initial period of three years and thereafter may be terminated upon twelve months written notice by either the ACD or the Company, although in certain circumstances the agreement may be terminated forthwith by notice in writing by the ACD to the Company or the Depositary, or by the Depositary or the Company to the ACD. The ACD cannot be replaced until the FCA has approved the appointment of another director in place of the retiring ACD. The ACD Agreement may be inspected at the offices of the ACD during normal business hours by any Shareholder or any Shareholder’s duly authorised agent. Alternatively, a copy of the ACD Agreement may be sent to any Shareholder at his request within 10 days of the Company’s receipt of such request.
4.2.2 The ACD is entitled to its pro rata fees and expenses to the date of termination and any additional expenses necessarily realised in settling or realising any outstanding obligations. No compensation for loss of office is provided for in the agreement. The ACD Agreement provides indemnities by the Company to the ACD other than for matters arising by reason of the ACD’s negligence, default, breach of duty or breach of trust in the performance of the ACD’s duties and obligations.
4.2.3 Where the ACD deals as principal in the Shares of Sub- funds, any profits or losses arising from such transactions shall accrue to the ACD and not to the Sub-fund. The ACD is under no obligation to account to the Depositary or the Shareholders for any profit it makes on the issue or re- issue of Shares or cancellation of Shares which it has redeemed. The fees to which the ACD is entitled are set out in section 28.
5 The Depositary
National Westminster Bank Plc is the Depositary of the Company.
The Depositary is incorporated in England as a public limited company. Its registered and head office is at 000 Xxxxxxxxxxx,
Xxxxxx, XX0X 0XX. The ultimate holding company of the Depositary is the Royal Bank of Scotland Group plc, which is incorporated in Scotland. The principal business activity of the Depositary is banking.
5.1 Duties of the Depositary
The Depositary is responsible for the safekeeping of scheme property, monitoring the cash flows of the Sub-funds and must ensure that certain processes carried out by the ACD are performed in accordance with the applicable rules and scheme documents.
5.2 Conflicts of interest
The Depositary may act as the depositary of other open-ended investment companies and as trustee or custodian of other collective investment schemes.
It is possible that the Depositary and/or its delegates and sub- delegates may in the course of its or their business be involved in other financial and professional activities, which may on occasion have potential conflicts of interest with the Fund or a particular Sub- fund and/or other funds managed by the ACD, or other funds for which the Depositary acts as the depositary, trustee or custodian. The Depositary will, however, have regard in such event to its obligations under the Depositary Agreement and the Regulations and, in particular, will use reasonable endeavours to ensure that the performance of its duties will not be impaired by any such involvement it may have and that any conflicts which may arise will be resolved fairly and in the best interests of Shareholders collectively so far as practicable, having regard to its obligations to other clients.
Nevertheless, as the Depositary operates independently from the Company, Shareholders, the ACD and its associated suppliers and the Custodian, the Depositary does not anticipate any conflicts of interest with any of the aforementioned parties.
Up to date information regarding (i) the Depositary’s name, (ii) the description of its duties and any conflicts of interest that may arise between the Company, the Shareholders or the ACD and the Depositary, and (iii) the description of any safekeeping functions delegated by the Depositary, the description of any conflicts of interest that may arise from such delegation, and the list showing the identity of each delegate and sub-delegate, will be made available to Shareholders on request.
5.3 Delegation of Safekeeping Functions
The Depositary is permitted to delegate (and authorise its delegate to sub-delegate) the safekeeping of Scheme Property.
The Depositary has delegated safekeeping of the Scheme Property to State Street Bank and Trust Company (“the Custodian”). In turn, the Custodian has delegated the custody of assets in certain markets in which the Company may invest to various sub-delegates (“Sub-Custodians”). A list of Sub-Custodians is given in Appendix 6. Investors should note that the list of Sub-Custodians is updated only at each Prospectus review.
5.4 Updated Information
Up-to-date information regarding the Depositary, its duties, its conflicts of interest, and the delegation of its safekeeping functions will be made available to shareholders on request.
5.5 Terms of Appointment
The Depositary was appointed under a Depositary Agreement dated 18 March 2016 between the ACD, the Company and the Depositary (the “Depositary Agreement”).
5.5.1 Under the Depositary Agreement, the Depositary is free to render similar services to others, and the Depositary, the Company and the ACD are subject to a duty not to disclose confidential information.
5.5.2 The powers, duties, rights and obligations of the Depositary, the Company and the ACD under the
Depositary Agreement shall, to the extent of any conflict, be overridden by the FCA Rules.
5.5.3 Under the Depositary Agreement, the Depositary will be liable to the Company for any loss of Financial Instruments held in Custody or for any liabilities incurred by the Company as a result of the Depositary’s negligent or intentional failure to fulfil its obligations.
However, the Depositary Agreement excludes the Depositary from any liability except in the case of fraud, wilful default, negligence or failure to exercise due care and diligence in the performance or non-performance of its obligations.
It also provides that the Company will indemnify the Depositary for any loss suffered in the performance or non- performance of its obligations except in the case of fraud, wilful default, negligence or failure to exercise due care and diligence on its part.
5.5.4 The Depositary Agreement may be terminated on 90 days’ notice by the Company or the Depositary or earlier on certain breaches or the insolvency of a party. However, termination of the Depositary Agreement will not take effect, nor may the Depositary retire voluntarily, until the appointment of a new Depositary.
5.5.5 Details of the fees payable to the Depositary are given under ‘Depositary’s Fee, Charges and Expenses’ in section 28.4.
5.5.6 The Depositary has appointed State Street Bank and Trust Company to assist the Depositary in performing its functions of custodian of the documents of title or documents evidencing title to the property of the Company. The relevant arrangements prohibit State Street Bank and Trust Company as such custodian from releasing the documents into the possession of a third party without the consent of the Depositary.
6 The Investment Manager
The ACD has appointed M&G Investment Management Limited (“MAGIM”) to provide investment management and advisory services in respect of the Sub-funds identified in Appendices 1 and
4. The Investment Manager has authority to make decisions on behalf of the Company and the ACD in respect of the acquisition and disposal of property at any time comprising the relevant Sub- fund and to advise in respect of the rights associated with the holding of such property. The Investment Manager has been appointed under an agreement between the ACD and the Investment Manager whereby the ACD accepts responsibility for all these services provided by the Investment Manager to the Company. The investment management agreement may be terminated on three months written notice by the Investment Manager or the ACD, or immediately by the ACD if it decides that it is in the best interests of Shareholders to do so.
The Investment Manager’s principal activity is acting as an investment manager and it is an Associate of the ACD by being a subsidiary of Prudential plc.
7 Administrator and Registrar
The ACD employs DST Financial Services Europe Limited to provide certain administration services and act as registrar to the Company. The ACD also employs RBC Investor Services Bank
S.A. to provide certain administration services for the M&G Securities International Nominee Service.
8 The Auditor
The auditor of the Company is Xxxxx & Young LLP of Atria One, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxx Xxxxxxx.
9 Register of Shareholders
The Register of Shareholders is maintained by DST at its office at XXX Xxxxx, Xx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxx XX00 0XX and may be inspected at that address during normal business hours by any Shareholder or any Shareholder’s duly authorised agent.
10 Fund Accounting and Pricing
The ACD has appointed State Street Bank and Trust Company to undertake the fund accounting and pricing functions on behalf of the Company.
11 Collateral Management
Where the Company enters into OTC derivative transactions, JPMorgan Chase Bank, N.A. will provide administrative services in connection with the collateral management functions.
12 Buying Shares and Selling Shares – General Information
12.1 On any given Dealing Day the ACD will be willing to sell Shares of at least one Class in each sub-fund.
12.2 The ACD has the right to reject, on reasonable grounds relating to the circumstances of the applicant, any application for Shares in whole or part, and in this event the ACD will return any money sent, or the balance of such monies, at the risk of the applicant. The ACD may also cancel any previously accepted request for the issue of Shares in the event of either non-payment of the amount due or undue delay in payment by the applicant, including the non- clearance of cheques or other documents presented in payment.
12.3 Any subscription monies remaining after a whole number of Shares has been issued may not be returned to the applicant. Instead, fractions may be issued in such circumstances. A fraction is equivalent to one thousandth of a larger denomination Share.
12.4 The minimum initial lump sum, subsequent lump sum and regular savings plan subscriptions for Shares and the minimum redemption and minimum holding amounts in the sub-funds are set out for each sub-fund in Appendices 1 & 4. At its discretion, the ACD may reject any request to buy Shares for less than the minimum initial lump sum or subsequent lump sum value (as appropriate). If at any time a Shareholder’s holding is below the specified holding minimum, the ACD reserves the right to sell the Shares and send the proceeds to the Shareholder, or at its absolute discretion convert the shares to another Share Class within the same sub-fund.
12.5 Please note that:
• Sterling Class C Shares are available only to a company which is an associate company or to other collective investment schemes managed by the ACD or a company which the ACD deems to be an associate company.
• Sterling Class R Shares are available only to Intermediate Unitholders or where the deal has been arranged by a financial adviser. Where a purchase by a Shareholder of Sterling Class R Shares has been arranged by a financial adviser the ACD will maintain a record of that financial adviser linked to their account with the ACD. If a Shareholder of Class R Shares has their financial adviser removed from their account (whether at the request of the Shareholder or the financial adviser, or as a result of the financial adviser no longer being authorised by the FCA), the ACD reserves the right at its absolute discretion to switch those Shares to Class A Shares within the same sub- fund. Shareholders should note that the ongoing charge of Class A Shares is greater than that of Class R Shares.
• Shares denominated in currencies other than Sterling can normally only be bought and sold via the M&G Securities International Nominee Service (see 14.2).
• Sterling Class I and I-H Shares, and Class C and Class C-H Shares denominated in currencies other than sterling are available to:
- Eligible Counterparties, investing for their own account; and
- other collective investment schemes; and
- distributors, platforms and other forms of intermediary who operate fee based arrangements with their clients to provide advisory or discretionary portfolio management services and do not receive any fee rebates from the ACD. For these clients, minimum subscription limits will not be applied;
- companies which the ACD deems to be associate companies of such companies and with other investors in accordance with the terms of their arrangements with the ACD.
Existing Shareholders in the Class C and I Shares, who held such Shares as at 30 January 2018 but no longer comply with the foregoing, can continue to hold such Shares and will be able to apply for additional subscriptions in Class C and I Shares which they hold. Changes to such arrangements will revert to the terms detailed above.
• Class J Shares are only available to the following investors:
- Eligible Counterparties, investing for their own account; and
- other collective investment schemes; and
- distributors and other forms of intermediary, who operate fee based arrangements with their clients to provide advisory or discretionary portfolio management services and do not receive any fee rebates from the ACD; and
- companies which the ACD deems to be associate companies and with other investors in accordance with the terms of their agreements with the ACD.
The ACD shall not pay any fee rebates on the Class J Shares to investors.
Such investors will only be able to invest in Class J Shares if they:
- have entered into a specific prior written agreement with the ACD (where the Class J Shares are held via an Intermediate Unitholder, the end investor must have entered such agreement with the ACD) and;
- have a significant investment in the Fund as determined on a case to case basis by the ACD.
Where an investor’s holding in the Share class falls below a level determined solely by the ACD, the ACD reserves the right at its absolute discretion to:
- reject any new subscriptions in the Class J shares; and
- switch any remaining Class J Shares to Sterling Class I Shares, or Class C Shares denominated in currencies other than Sterling, as appropriate within the Fund.
• Class Z Shares are only available at the ACD’s discretion. Class Z Shares would then be available for investors who are eligible for the Sterling Class I Shares and Class C Shares denominated in currencies other than sterling, but only once the investor has entered into a prior written fee paying arrangement with the ACD.
These shares are designed to accommodate an alternative charging structure under whereby the annual fee, normally charged to the class and then passed on in the share price, is instead administratively levied and collected directly from the investor.
12.6 Shareholders have the right to sell Shares back to the ACD or require that the ACD arranges for the Company to buy their Shares on any Dealing Day unless the value of Shares which a Shareholder wishes to sell will mean that the Shareholder will hold Shares with a value less than the required minimum holding for the
sub-fund concerned, in which case the Shareholder may be required to sell the entire holding.
12.7 Subject to the Shareholder maintaining the minimum holding stated in this Prospectus, part of a Shareholder’s holding may be sold but the ACD reserves the right to refuse a request to sell Shares if the value of the class of Shares of any sub-fund to be sold is less than the sum specified in Appendices 1 & 4.
13 Buying and selling Shares on the main register of Shareholders
13.1 Shares can be bought as a lump sum investment only. Investors wishing to make regular monthly contributions should invest via The M&G Savings Plan (please see 14.1 below).
13.3 Payment for Shares purchased by post must accompany the application. Payment for Shares purchased by other means must be made by no later than three business days after the valuation point following receipt of the instructions to purchase.
13.4 Requests to sell Shares may be made by post, telephone, or any electronic or other means which the ACD may from time to time determine either directly or via an authorised intermediary; the ACD may require telephone or electronic requests to be confirmed in writing.
13.5 Requests to buy and sell Shares received before 12:00 noon (UK time) on a Dealing Day will be executed at the price valid on that Dealing Day. Requests received after 12:00 noon (UK time) will be executed using the price valid on the following Dealing Day.
13.6 Payment of proceeds will be made no more than three business days after the later of:
• receipt by the ACD, when required, of sufficient written instructions duly signed by all the relevant Shareholders and completed as to the appropriate number of Shares, together with any other appropriate evidence of title; and
• the valuation point following receipt by the ACD of the request to sell.
13.7 The requirement for sufficient written sale instructions is normally waived for Shareholders of Sterling Classes of Shares if all the following conditions are met:
• Dealing instructions are given by the registered holder in person;
• The holding is registered in a sole name;
• The sale proceeds are to be made payable to the registered holder at their registered address, which has not changed within the previous 30 days; and
• The total amount payable in respect of sales by that holder on one business day does not exceed £20,000.
13.8 A contract note giving details of the Shares purchased or sold, and the price used will be sent to the Shareholder (the first named, in the case of joint Shareholders) or to an authorised agent, not later than the end of the business day following the valuation point by reference to which the price is determined. Where appropriate, this may be accompanied by a notice of the applicant’s right to cancel a purchase.
13.9 Currently share certificates will not be issued in respect of Shares. Ownership of Shares will be evidenced by an entry on the
Company’s Register of Shareholders. Statements in respect of periodic allocations of income of each sub-fund will show the number of Shares held by the recipient in the sub-fund in respect of which the allocation is made. Individual statements of a Shareholder’s Shares will also be issued at any time on request by the registered holder (or, when Shares are jointly held, the first named holder).
13.10 Regular Withdrawal Facility on M&G Dividend Fund
13.10.1 Accumulation Shareholders, or Income Shareholders who are having their income reinvested to purchase further Shares, and whose holding in M&G Dividend Fund has a value of at least £1000 may request that a percentage value of their holding is automatically redeemed each year. Such requests must be in writing using the “Regular Withdrawal Facility” form available from the ACD.
13.10.2 Regular redemptions made using the Regular Withdrawal Facility may not exceed, on an annualised basis, an amount greater than 7% of the value of a Shareholding in M&G Dividend Fund.
13.10.3 Subject to the percentage figure in 13.10.2 regular redemptions may be made on a monthly, quarterly, half- yearly or annual basis and will be based upon one twelfth, one quarter, one half or the whole requested percentage value of the Shareholder’s holding, respectively. The value of the Shareholding will be calculated using the prevailing price on the day the regular redemption is made (see 13.10.4).
13.10.4 Regular redemptions will be made on the last day of each month. Where the last day of a month is not a Dealing Day, the redemption will take place on the next Dealing Day. Settlement will occur three business days following the redemption. The first redemption will occur in the month following receipt of a Shareholder’s “Regular Withdrawal Facility” form.
13.10.5 Settlement of redemptions from the Regular Withdrawal Facility will be made only to the Bank Account nominated on the “Regular Withdrawal Facility” form.
13.10.6 Accumulation Shareholders using the Regular Withdrawal Facility may vary their nominated Bank Account, frequency of redemption or the annual percentage redemption figure by completing a new “Regular Withdrawal Facility” form.
13.10.7 Shares redeemed as part of the Regular Withdrawal Facility will not be subject to any Redemption Charge (see 16.2).
13.10.8 Shareholders using the Regular Withdrawal Facility should note that such redemptions are treated as disposals for the purposes of Capital Gains Tax.
13.10.9 Shareholders should note that where the annual percentage growth in value of their holding is less than the annual percentage value being redeemed using the Regular Withdrawal Facility, they will in effect be eroding the capital value of their original investment.
14 Buying and selling Shares via a Group Plan
14.1 The M&G Savings Plan, The M&G ISA, The M&G Junior ISA
14.1.1 The ACD offers The M&G Savings Plan, designed primarily to facilitate making regular savings by Direct Debit to a range of M&G Funds, and The M&G ISA and The M&G Junior ISA, designed to allow UK individuals to save tax efficiently in a range of M&G Funds. This is a summary of the buying and selling process of The M&G Savings Plan, The M&G ISA and The M&G Junior ISA. Please see our “Important Information for Investors” document for full information including the Terms & Conditions.
14.1.2 Shares can be bought as a lump sum investment or monthly by Direct Debit.
14.1.3 Postal applications may be made on application forms obtained from the ACD. The address for postal dealing is the same as in section 13.2. Alternatively, lump sum investments can be made under approved circumstances by telephoning M&G’s Customer Dealing Line (please see section 13.2).
14.1.4 Payment for Shares purchased must accompany the application.
14.1.5 Requests to sell Shares may be sent in writing to the address in section 13.2. Alternatively, requests to sell Shares can be made under approved circumstances by telephoning M&G’s Customer Dealing Line (please see section 13.2). Payment of proceeds will be made no more than three business days, after the valuation point following receipt by the ACD of the request to sell, provided we know the proceeds from all subscriptions, including Direct Debits, have cleared. We may delay paying the sale proceeds from any uncleared subscriptions, until we are satisfied that we have received all amounts which are due to us. Please note that Shares held in The M&G Junior ISA may not be sold without the permission of HMRC.
14.1.6 For lump sum investments, a contract note giving details of the Shares purchased and the price used will be issued by the end of the business day following the valuation point by reference to which the price is determined, together with, where appropriate, a notice of the applicant’s right to cancel. A contract note giving details of the Shares sold and the price used will be issued by the end of the business day following the valuation point by reference to which the price is determined.
14.1.7 Requests to buy and sell Shares received before 12:00 noon (UK time) on a Dealing Day will be executed at the price valid on that Dealing Day. Requests received after 12:00 noon (UK time) will be executed using the price valid on the following Dealing Day.
14.1.8 Investors’ share ownership will be evidenced by an entry in the name of M&G Nominees Limited, Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, XX0X 0XX on the Company’s register of shareholders.
14.1.9 Statements will be issued twice each year. A summary of transactions will also be issued at any time on request by the holder.
14.2 The M&G Securities International Nominees Service
14.2.1 The ACD offers a nominee service (the “M&G Securities International Nominee Service”) primarily designed to facilitate the buying and selling of non-sterling denominated Share Classes (though in certain circumstances, the ACD may also permit sterling denominated Share Classes to be bought and sold via this service). This is a summary of the buying and selling process of the “M&G Securities International Nominee Service”. Please see the Terms & Conditions of the “M&G Securities International Nominee Service” or your agreement with the ACD, and Appendix 4A (where appropriate) for more information.
14.2.2 Investors who wish to use the M&G Securities International Nominee Service for the first time should complete and sign the application form (available from the ACD) and mail it to RBC I&TS, Re: M&G Securities Limited, 00 Xxxxx xx Xxxxxx, X-0000 Xxxx-xxx-Xxxxxxx, Xxxxxxxxxx”. The completed forms must be received before 9.30am CET on a Dealing Day in order for the investment account to be opened and the buying order to be executed at the share price valid on that day.
14.2.3 Subsequent purchase instruction can be sent directly to the ACD by Fax (on x000 0000 0000) or Post (at the address in section 14.2.2). Any such purchase instruction should
state the investor’s account number (which is stated on each contract note), the name of the investor, the name of the sub-fund into which the amount is to be invested and the respective share class (ISIN Code). In the absence of such instructions, it will not be possible to process the purchase order and the money will be returned without interest and at the expense of the sender. The minimum amount for a subsequent investment per sub-fund and share class is disclosed in Appendix 4.
14.2.4 Subsequent purchase instructions, or requests to redeem Shares must be received before 11:30am CET on a Dealing Day in order for the buying or selling order to be executed at the share price valid on that Dealing Day. Requests received after 11:30am CET will be executed using the share price valid on the following Dealing Day.
14.2.5 Payment for Xxxxxx purchased must be made by no later than three business days after the valuation point at which the buying order is executed.
14.2.6 Redemption proceeds will be paid to investors by bank transfer by the settlement date quoted on the contract note. This should be no more than three business days after the valuation point at which the selling order is executed.
14.2.7 Investors should take into account that the processing time needed by banks involved in such transfer may differ and that it can therefore not be guaranteed that the redemption proceeds will be credited to the investor’s bank account within the aforementioned.
14.2.8 Investors’ share ownership will be evidenced by an entry in the name of M&G International Investments Nominees Limited, Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX on the Company’s register of shareholders. This service is available to shareholders free of charge.
15 Switching and converting shares
15.1 Switching
15.1.1 Holders of Shares in a Sub-fund may at any time switch all or some of their Shares of one Sub-fund (‘Original Shares’) for Shares of another Sub-fund of this or another M&G OEIC (‘New Shares’) provided they are eligible to hold Shares in that class or Sub-fund and are in the same currency. The number of New Shares issued will be determined by reference to the respective prices of New Shares and Original Shares at the valuation point applicable at the time the Original Shares are redeemed and the New Shares are issued.
15.1.2 Switching may be effected by giving instructions to the ACD and the Shareholder may be required to provide sufficient written instructions (which, if required - see paragraph 14.2.3 - in the case of joint Shareholders must be signed by all the joint holders).
15.1.3 The ACD may at its discretion charge a fee on the switching of Shares between Sub-funds (see paragraph 16.3). When a fee is charged it will not exceed the aggregate of the relevant redemption and initial charges in respect of the Original Shares and the New Shares.
15.1.4 If the switch would result in the Shareholder holding a number of Original Shares or New Shares of a value which is less than the minimum holding in the Sub-fund concerned the ACD may, if it thinks fit, switch the whole of the applicant’s holding of Original Shares to New Shares or refuse to effect any switch of the Original Shares. No switches will be effected during any period when the right of Shareholders to require the redemption of their Shares is suspended. The general provision on procedures relating to redemption will apply equally to a switch. Switch instructions must be received by the ACD before the valuation point on a Dealing Day in the Sub-fund or Sub-
funds concerned to be dealt with at the prices at those valuation points on that Dealing Day, or at such other date as may be approved by the ACD. Switch requests received after a valuation point will be held over until the valuation point in the next Dealing Day in the relevant Sub-fund or Sub-funds.
15.1.5 The ACD may adjust the number of New Shares to be issued to reflect the imposition of any switching fee together with any other charges or levies in respect of the issue or sale of the New Shares or repurchase or cancellation of the Original Shares as may be permitted pursuant to the Regulations.
15.1.6 Please note that a switch of Shares in one Sub-fund for Shares in any other Sub-fund is treated as a redemption and sale and will, for persons subject to UK taxation, be a realisation for the purposes of capital gains taxation.
15.1.7 A Shareholder who switches Shares in one Sub-fund for Shares in any other Sub-fund has no right by law to withdraw from or cancel the transaction.
15.1.8 Terms and current charges for the switching of Shares of any class of any Sub-fund, including for the Shares issued by another M&G OEIC or for the switching of units in a regulated scheme operated by the ACD, may be obtained from the ACD.
15.2 Conversions
15.2.1 Conversions of Income Shares to Accumulation Shares and of Accumulation Shares to Income Shares of the same Class in the same Sub-fund are undertaken by reference to the respective Share prices. For persons subject to UK taxation, this will not be a realisation for the purposes of capital gains taxation.
15.2.2 Where a Sub-fund issues multiple Share Classes, a Shareholder may convert Shares of one Class for Shares in another Class where they are eligible to hold the other Class. Requests to convert between Share Classes must be submitted using the appropriate form available from the ACD. Such conversions will be executed within three Dealing Days of receipt of a valid instruction. Requests to convert between Share Classes are undertaken by reference to the respective Share prices of each Class. For interest distributing funds, whose prices are currently calculated net of income tax, in accordance with applicable tax law, these prices will be “net” prices. The impact of using net prices where the conversion of Shares is to a Class with a lower ACD’s annual remuneration (see Appendices 1 and 4) is that the Sub-fund’s total tax charge will increase and this increase will be borne by all Shareholders in the receiving Share Class. This approach has been agreed with the Depositary subject to the total impact to Shareholders being immaterial. Where the ACD determines at its absolute discretion that Share Class conversions are materially prejudicial to the Shareholders of a Share Class, instructions to convert between Share Classes will only be executed on the Dealing Day following the relevant Sub-fund’s XD date. In such circumstances, instructions to convert between Share Classes must be received by the ACD no sooner than ten business days before the Sub-fund’s relevant XD date.
15.2.3 Please note that conversions may be subject to a fee. The fee will not exceed an amount equal to the aggregate of the then prevailing redemption charge (if any) in respect of Original Shares and the initial charge (if any) in respect of New Shares and is payable to the ACD.
16 Dealing charges
16.1 Initial Charge
The ACD may impose a charge on the buying of Shares. This charge is a percentage of the total amount of your investment and is deducted from your investment before Shares are purchased. The current level in relation to the Sub-funds are set out for each Sub-fund in Appendices 1 and 4 and are subject to discounts that the ACD at its absolute discretion may apply from time to time. Increases from the current rates of charge can only be made in accordance with the Regulations and after the ACD has revised the Prospectus to reflect the increased rate.
16.2 Redemption Charge
16.2.1 The ACD may make a charge on the cancellation and redemption (including transfer) of Shares. At present, a redemption charge is levied only on the selling of Shares in a Sub-fund which does not have an initial charge on the buying of Shares. Other Shares issued and bought, and persons known to the ACD to have made arrangements for the regular purchase of other Shares while this Prospectus is in force, will not be subject to any redemption charge introduced in the future in respect of those Shares. Currently, those Shares deemed to carry a redemption charge will carry a reducing redemption charge calculated in accordance with the table below. With accumulation shares, where any income is reinvested back into the share price, the valuation when calculating a redemption will include the capital gain associated with this reinvested income. In relation to the imposition of a redemption charge as set out above, where Shares of the class in question have been purchased at different times by a redeeming Shareholder, the Shares to be redeemed shall be deemed to be the Shares which incur the least cost to the Shareholder and thereafter the Shares purchased first in time by that Shareholder.
Redemption charge table
The deduction from the mid value for redemption before the following anniversaries would be:
1st year 4.5%
2nd year 4.0%
3rd year 3.0%
4th year 2.0%
5th year 1.0%
Thereafter Nil
16.2.2 The ACD may not introduce or increase a redemption charge on Shares unless:
16.2.2.1 the ACD has complied with the Regulations in relation to that introduction or change; and
16.2.2.2 the ACD has revised the Prospectus to reflect the introduction or change and the date of its commencement and has made the revised Prospectus available.
16.2.3 In the event of a change to the rate or method of calculation of a redemption charge, details of the previous rate or method of calculation will be available from the ACD.
16.3 Switching Fee
On the switch of Shares of a Sub-fund for Shares of another Sub- fund the Instrument of Incorporation authorises the Company to impose a switching fee. The fee will not exceed an amount equal to the aggregate of the then prevailing redemption charge (if any) in
respect of Original Shares and the initial charge (if any) in respect of New Shares and is payable to the ACD.
17 Other dealing information
17.1 Dilution
17.1.1 The basis on which each Sub-fund’s investments are valued for the purpose of calculating the price of Shares as stipulated in the Regulations and the Company’s Instrument of Incorporation is summarised in section 24. However, the actual cost of purchasing or selling investments for a Sub-fund may deviate from the mid- market value used in calculating the price of Shares in the Sub-fund due to dealing costs such as broking charges, taxes, and any spread between the buying and selling prices of the underlying investments. These dealing costs can have an adverse effect on the value of the Sub-fund, known as “dilution”. The Regulations allow the cost of dilution to be met directly from the Sub-fund’s assets or to be recovered from investors on the purchase or redemption of Shares in the Sub-fund inter alia by means of a dilution adjustment to the dealing price, and this is the policy which has been adopted by the ACD. The ACD shall comply with rule COLL 6.3.8R in its application of any such dilution adjustment. The ACD’s policy is designed to minimise the impact of dilution on any Sub-fund.
17.1.2 The dilution adjustment for each Sub-fund will be calculated by reference to the estimated costs of dealing in the underlying investments of that Sub-fund, including any dealing spreads, commissions and transfer taxes. The need to apply a dilution adjustment will depend on the relative volume of sales (where they are issued) to redemptions (where they are cancelled) of shares. The ACD may apply a dilution adjustment on the issue and redemption of such shares if, in its opinion, the existing shareholders (for sales) or remaining shareholders (for redemptions) might be adversely affected, and if in applying a dilution adjustment, so far as practicable, it is fair to all shareholders and potential shareholders. In specie transfers will not be taken into account when determining any dilution adjustment and any incoming portfolio will be valued on the same basis as the Sub-fund is priced (i.e. offer plus notional dealing charges, mid, or bid less notional dealing charges). When a dilution adjustment is not applied there may be a dilution of the assets of the Sub-fund which may constrain the future growth of that Sub-fund.
17.1.3 The ACD may alter its current dilution adjustment policy by giving shareholders at least 60 days’ notice and amending the Prospectus before the change takes effect.
17.1.4 Based on experience, the ACD would typically expect to make a dilution adjustment on most days, and this would ordinarily be of the magnitude shown in the table below. The ACD reserves the right to adjust the price by a lesser amount but will always make such an adjustment in a fair manner solely to reduce dilution and not for the purpose of creating a profit or avoiding a loss for the account of the ACD or an associate. It should be noted that as dilution is related to inflows and outflows of monies and the purchase and sale of investments it is not possible to predict accurately if and when dilution will occur and to what extent.
Dilution adjustment table
Typical dilution adjustments for the following Sub-funds would be:
M&G Corporate Bond Fund + 0.34% / - 0.34 % M&G Dividend Fund + 0.53% / - 0.10 % M&G Emerging Markets Bond Fund +0.29%/ - 0.29 %
M&G European Corporate Bond Fund +0.20 %/ - 0.21% M&G European High Yield Bond Fund +0.34% / - 0.34 % M&G Fund of Investment Trust Shares +0.82%/ - 0.38% M&G Global Government Bond Fund + 0.19% / - 0.19% M&G Recovery Fund + 0.83% / - 0.40% M&G Smaller Companies Fund +0.82 % / - 0.36%
Positive dilution adjustment figures indicate a typical
increase from mid price when the Sub-fund is experiencing net issues. Negative dilution adjustment figures indicate a typical decrease from mid price when the Sub-fund is experiencing net redemptions. Figures are based on the historic costs of dealing in the underlying investments of the relevant Sub-funds for the twelve months to 31 December 2017, including any spreads, commissions and transfer taxes.
17.2 In specie issues and redemptions
At its absolute discretion the ACD may agree or determine that instead of payment in cash to, or from, the Shareholder for Shares in a Sub-fund, the settlement of an issue or redemption transaction may be effected by the transfer of property into or out of the assets of the Company on such terms as the ACD shall decide in consultation with the investment manager and the Depositary. In the case of redemptions, the ACD shall give notice to the Shareholder prior to the redemption proceeds becoming payable of its intention to transfer property to the Shareholder and, if required by the Shareholder, may agree to transfer to the Shareholder the net proceeds of the sale of such property.
The ACD may also offer to sell an investor’s property and invest the proceeds by purchasing Shares in the Company, subject to detailed terms and conditions available upon request.
17.3 Client Account
Cash may be held for investors in a client account in certain circumstances. Interest is not paid on any such balances.
17.4 Excessive Trading
17.4.1 The ACD generally encourages Shareholders to invest in Sub-funds as part of a medium to long-term investment strategy and discourages excessive, short term, or abusive trading practices. Such activities may have a detrimental effect on the Sub-funds and other Shareholders. The ACD has several powers to help ensure that Shareholder interests are protected from such practices. These include:
17.4.1.1 Refusing an application for Shares (see paragraph 12.7);
17.4.1.2 Fair Value Pricing (see section 24); and,
17.4.1.3 Applying the Dilution Adjustment (see paragraph 17.1).
17.4.2 We monitor shareholder dealing activity and if we identify any behaviour that, in our view, constitutes inappropriate or excessive trading, we may take any of the following steps with the shareholders we believe are responsible:
17.4.2.1 Issue warnings which if ignored may lead to further applications for Xxxxxx being refused;
17.4.2.2 Restrict methods of dealing available to particular Shareholders; and/or,
17.4.2.3 Impose a switching fee (see paragraph 16.3).
17.4.3 We may take these steps at any time, without any obligation to provide prior notice and without any liability for any consequence that may arise.
17.4.4 Inappropriate or excessive trading can sometimes be difficult to detect particularly where transactions are placed via a nominee account. The ACD therefore cannot guarantee that its efforts will be successful in eliminating such activities and their detrimental effects.
18 Money laundering
As a result of legislation in force in the United Kingdom to prevent money laundering, firms conducting investment business are responsible for compliance with money laundering regulations. The ACD may verify your identity electronically when you undertake certain transactions. In certain circumstances investors may be asked to provide proof of identity when buying or selling shares. Normally this will not result in any delay in carrying out instructions but, should the ACD request additional information, this may mean that instructions will not be carried out until the information is received. In these circumstances, the ACD may refuse to issue or, redeem Shares, release the proceeds of redemption or carry out such instructions.
19 Restrictions on dealing
19.1 The ACD may from time to time impose such restrictions as it may think necessary for the purpose of ensuring that no Shares are acquired or held by any person in breach of the law or governmental regulation (or any interpretation of a law or regulation by a competent authority) of any country or territory. In this connection, the ACD may, inter alia, reject in its discretion any application for the issue, sale, redemption, cancellation or switch of Shares or require the mandatory redemption of Shares or transfer of Shares to a person qualified to hold them.
19.2 The distribution of this prospectus and the offering of Shares in or to persons resident in or nationals of or citizens of jurisdictions outside the UK or who are nominees of, custodians or trustees for, citizens or nationals of other countries may be affected by the laws of the relevant jurisdictions. Such Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any Shareholder to satisfy himself as to the full observance of the laws and regulatory requirements of the relevant jurisdiction, including obtaining any governmental, exchange control or other consents which may be required, or compliance with other necessary formalities needing to be observed and payment of any issue, transfer or other taxes or duties due in such jurisdiction. Any such Shareholder will be responsible for any such issue, transfer or other taxes or payments by whomsoever payable and the Company (and any person acting on behalf of it) shall be fully indemnified and held harmless by such Shareholder for any such issue, transfer or other taxes or duties as the Company (and any person acting on behalf of it) may be required to pay.
19.3 If it comes to the notice of the ACD that any Shares (“affected Shares”) are owned directly or beneficially in breach of any law or governmental regulation (or any interpretation of a law or regulation by a competent authority) of any country or territory, which would (or would if other Shares were acquired or held in like circumstances) result in the Company incurring any liability to taxation which the Company would not be able to recoup itself or suffering any other adverse consequence (including a requirement to register under any securities or investment or similar laws or governmental regulations of any country or territory) or by virtue of which the Shareholder or Shareholders in question is/are not qualified to hold such Shares or if it reasonably believes this to be the case, the ACD may give notice to the Shareholder(s) of the affected Shares requiring the transfer of such Shares to a person who is qualified or entitled to own them or that a request in writing be given for the redemption of such Shares. If any Shareholder upon whom such a notice is served does not within thirty days after the date of such notice transfer their affected Shares to a person qualified to own them or submit a written request for their redemption to the ACD or establish to the satisfaction of the ACD (whose judgement is final and binding) that they or the beneficial owner are qualified and
entitled to own the affected Shares, they shall be deemed upon the expiration of that thirty day period to have given a request in writing for the redemption or cancellation (at the discretion of the ACD) of all the affected Shares pursuant to the Regulations.
19.4 A Shareholder who becomes aware that they are holding or own affected Shares shall forthwith, unless they have already received a notice as aforesaid, either transfer all their affected Shares to a person qualified to own them or submit a request in writing to the ACD for the redemption of all their affected Shares.
19.5 Where a request in writing is given or deemed to be given for the redemption of affected Shares, such redemption will be effected in the same manner as provided for under the Regulations, if effected at all.
20 Suspension of dealings in the Company
20.1 The ACD may with the agreement of the Depositary, or must if the Depositary so requires temporarily suspend for a period the issue, sale, cancellation and redemption of Shares or any class of Shares in any or all of the Sub-funds if the ACD or the Depositary is of the opinion that due to exceptional circumstances there is good and sufficient reason to do so having regard to the interests of Shareholders.
20.2 The ACD will notify Shareholders as soon as is practicable after the commencement of the suspension, including details of the exceptional circumstances which have led to the suspension, in a clear, fair and not misleading way and giving Shareholders details of how to find further information about the suspensions.
20.3 Where such suspension takes place, the ACD will publish, on its website or other general means, sufficient details to keep Shareholders appropriately informed about the suspension, including, if known, its possible duration.
20.4 During the suspension none of the obligations in COLL 6.2 (Dealing) will apply but the ACD will comply with as much of COLL
6.3 (Valuation and Pricing) during the period of suspension as is practicable in light of the suspension.
20.5 Re-calculation of the Share price for the purpose of sales and purchases will commence on the next relevant valuation point following the ending of the suspension.
20.6 The exceptional circumstances in which the ACD or the Depositary may require the temporary suspension of the issue, sale, cancellation and redemption of Shares, or any class of Shares in any or all the Sub-funds includes, but is not limited to the following:
20.6.1 during any period when, in the opinion of the ACD or the Depositary, an accurate valuation of a Sub-fund cannot occur, including:
20.6.1.1 where one or more markets is unexpectedly closed or where dealing is suspended or restricted;
20.6.1.2 during a political, economic, military or other emergency; or
20.6.1.3 during any breakdown in the means of communication or computation normally employed in determining the price or value of any of the investments of a Sub-fund or any Classes of Shares;
20.6.2 upon the decision of the ACD, having given sufficient notice to Shareholders, to wind up a Sub-fund (see section 34).
21 Governing law
All deals in Shares are governed by English law.
22 Valuation of the Company
22.1 The price of a Share of a particular class in the Company is calculated by reference to the Net Asset Value of the Sub-fund to which it relates and attributable to that class and adjusted for the effect of charges applicable to that class and further adjusted to reduce any dilutive effect of dealing in the Sub-fund (for more detail of dilution adjustment see 17.1). The Net Asset Value per Share of a Sub-fund is currently calculated at 12.00 noon UK time on each Dealing Day.
22.2 The ACD may at any time during a Dealing Day carry out an additional valuation if the ACD considers it desirable to do so.
23 Calculation of the Net Asset Value
23.1 The value of the scheme property of the Company or Sub-fund (as the case may be) shall be the value of its assets less the value of its liabilities determined in accordance with the following provisions.
23.2 All the scheme property (including receivables) of the Company (or the Sub-fund) is to be included, subject to the following provisions.
23.3 Property which is not cash (or other assets dealt with in paragraph 24.4) or a contingent liability transaction shall be valued as follows and the prices used shall be (subject as follows) the most recent prices which it is practicable to obtain:
23.3.1 units or shares in a collective investment scheme:
23.3.1.1 if, a single price for buying and selling units is quoted, at the most recent such price; or
23.3.1.2 if, separate buying or selling prices are quoted, at the average of the two prices provided the buying price has been reduced by any initial charge included therein and the selling price excludes any exit or redemption charge attributable thereto; or
23.3.1.3 if, in the opinion of the ACD, the price obtained is unreliable or no recent traded price is available or no recent price exists or if the most recent price available does not reflect the ACD’s best estimate of the value of the units or shares, at a value which, in the opinion of the ACD, is fair and reasonable;
23.3.2 exchange-traded derivative contracts:
23.3.2.1 if, a single price for buying and selling the exchange-traded derivative contract is quoted, at that price; or
23.3.2.2 if, separate buying and selling prices are quoted, at the average of the two prices; or
23.3.3 over-the-counter derivative products shall be valued in accordance with the method of valuation as shall have been agreed between the ACD and the Depositary;
23.3.4 any other investment;
23.3.4.1 if, a single price for buying and selling the security is quoted, at that price; or
23.3.4.2 if, separate buying and selling prices are quoted, the average of those two prices; or
23.3.4.3 if, in the opinion of the ACD, the price obtained is unreliable or no recent traded price is available or if no price exists or if the most recent price available does not reflect the ACD’s best estimate of the value of the securities, at a value which in the opinion of the ACD is fair and reasonable;
23.3.5 property other than that described in paragraphs 23.3.1, 23.3.2, 23.3.3 and 23.3.4 above: at a value which, in the opinion of the ACD, represents a fair and reasonable mid- market price.
23.4 Cash and amounts held in current, deposit and margin accounts and in other time-related deposits shall normally be valued at their nominal values.
23.5 In determining the value of the scheme property, all instructions given to issue or cancel Shares shall be assumed (unless the contrary is shown) to have been carried out and any cash payment made or received and all consequential action required by Regulations or the Instrument shall be assumed (unless the contrary shown to have been taken).
23.6 Subject to paragraphs 23.7 and 23.8 below, agreements for the unconditional sale or purchase of property which are in existence but uncompleted shall be assumed to have been completed and all consequential action required to have been taken. Such unconditional agreements need not be taken into account if made shortly before the valuation takes place and, in the opinion of the ACD, their omission will not materially affect the final Net Asset Value amount.
23.7 Futures or contracts for differences which are not yet due to be performed and unexpired and unexercised written or purchased options shall not be included under paragraph 23.6.
23.8 All agreements are to be included under paragraph 23.7 which are, or ought reasonably to have been, known to the person valuing the property.
23.9 An estimated amount for anticipated tax liabilities (on unrealised capital gains where the liabilities have accrued and are payable out of the property of the Scheme; on realised capital gains in respect of previously completed and current accounting periods; and on income where liabilities have accrued) at that point in time including (as applicable and without limitation) capital gains tax, income tax, corporation tax, value added tax, stamp duty, and any foreign taxes and duties will be deducted.
23.10 An estimated amount for any liabilities payable out of the scheme property and any tax thereon treating periodic items as accruing from day to day will be deducted.
23.11 The principal amount of any outstanding borrowing whenever repayable and any accrued but unpaid interest on borrowing will be deducted.
23.12 An estimated amount for accrued claims for repayments of tax of whatever nature to the Company which may be recoverable will be added.
23.13 Any other credits or amounts due to be paid into the scheme property will be added.
23.14 A sum representing any interest or any income accrued due or deemed to have accrued but not received will be added.
23.15 The amount of any adjustment deemed necessary by the ACD to ensure that the Net Asset Value is based on the most recent information and is fair to all Shareholders will be added or deducted as appropriate.
23.16 Currencies or values in currencies other than a Sub-fund’s Valuation Currency shall be converted at the relevant valuation point at a prevailing rate of exchange which is not likely to result in any material prejudice to the interests of Shareholders or potential Shareholders. The Valuation Currency of each Sub-fund is noted in Appendices 1 and 4.
24 Price per share in each Sub-fund and each class
The price per Share at which Shares are bought by investors is the sum of the Net Asset Value of a Share adjusted to reduce any dilutive effect of dealing in the Sub-fund (for more detail of dilution adjustment see 17.1) before any initial charge. The price per Share
at which Shares are sold by investors is the Net Asset Value per Share adjusted to reduce any dilutive effect of dealing in the Sub- fund (for more detail of dilution adjustment see 17.1) before any applicable redemption charge.
25 Pricing basis
There shall be a single price for a Share in any Class. The Company deals on a forward pricing basis. A forward price is the price calculated at the next valuation point after the purchase or sale is agreed.
26 Publication of prices
The most recent price of Shares appear daily on our web-site at xxx.xxxxx.xxx or can be obtained from Customer Relations on 0800 390390. The most recent price of Sterling Class C shares appear on M&G’s intranet site.
27 Risk Factors
Potential investors should consider the risk factors referenced in Section 42 before investing in the Company.
28 Charges and Expenses
Introduction
This section details the payments that may be made out of the Company and its Sub-funds to the parties operating the Company and its Sub-funds, to meet the costs of administration of the Company and its Sub-funds and in respect of the investment and safekeeping of their scheme property.
Each Class of shares in a Sub-fund has an Ongoing Charges Figure and this is shown in the relevant Key Investor Information Document. The Ongoing Charges Figure is intended to assist Shareholders to ascertain and understand the impact of charges on their investment each year and to compare the level of those charges with the level of charges in other funds.
The Ongoing Charges Figure excludes portfolio transaction costs and any initial charge or redemption charge but will capture the effect of the various charges and expenses referred to in this section. In common with other types of investors in financial markets, the Sub-funds incur costs when buying and selling underlying investments in pursuit of their investment objective. These portfolio transaction costs include dealing spread, broker commissions, transfer taxes and stamp duty incurred by the Sub-fund on transactions. The annual and half-yearly reports of each Sub-fund provide further information on portfolio transaction costs incurred in the relevant reporting period.
VAT may be payable on the charges or expenses mentioned in this section.
28.1 The ACD’s Annual Management Charge
28.1.1 The ACD is permitted to take a charge from each Share Class of each Sub-fund as payment for carrying out its duties and responsibilities. This is known as the ACD’s “Annual Management Charge” (sometimes abbreviated to “AMC”).
28.1.2 The Annual Management Charge is based on a percentage of the Net Asset Value of each Share Class in each Sub-fund. The annual rate of this charge is set out for each Sub-fund in Appendices 1 and 4.
28.1.3 Each day the ACD charges one-365th of the Annual Management Charge (or one-366th if it is a leap year). If the day is not a Dealing Day, the ACD will take the charge into account on the next Dealing Day. The ACD calculates this charge using the Net Asset Value of each Share Class on the previous Dealing Day.
28.1.4 Though the Annual Management Charge is calculated and taken into account daily in each Share Class’s price, it is actually paid to the ACD every fortnight.
28.1.5 Where a Sub-fund invests in the units or shares of another fund managed by the ACD, or by an associate of the ACD, the ACD will reduce its Annual Management Charge by the amount of any equivalent charge that has been taken on
the underlying funds. Underlying funds will also waive any initial or redemption charges which might otherwise apply. That way, the ACD ensures that Shareholders are not charged twice.
28.2 The ACD’s Administration Charge
28.2.1 The ACD is permitted to take a charge from each Share Class of each Sub-fund as payment for administrative services to the Company. This is called the Administration Charge. This covers costs such as the maintenance of the Company’s register, the internal administrative costs involved in buying and selling shares in each Sub-fund, the payment of each Sub-fund’s distributions, and the payment of the fees of regulators in the UK or in other countries where Sub-funds are registered for sale.
28.2.2 The Administration Charge is based on a percentage of the Net Asset Value of each Share Class in each Sub-fund. The annual rate of this charge is set out in Appendices 1 and 4 (plus any value added tax if applicable).
28.2.3 The Administration Charge is calculated and taken into account daily and is paid fortnightly to the ACD on the same basis as described at 28.1.3 and 28.1.4 for the Annual Management Charge.
28.2.4 If the cost of providing administrative services to the Company is more than the Administration Charge taken in any period, the ACD will make up the difference. If the cost of providing administrative services to the Company is less than the Administration Charge taken in any period, the ACD will keep the difference.
28.3 The ACD’s Share Class Hedging Charge
28.3.1 The ACD is permitted to take a charge from each hedged Share Class of each Sub-fund as payment for hedging services to that Share Class. This is called the Share Class Hedging Charge.
28.3.2 The Share Class Hedging Charge is a variable rate detailed in Appendices 1 and 4 (plus any value added tax if applicable). The exact rate will vary within the specified range depending upon the total amount of share class hedging activities across the entire range of OEICs managed by the ACD.
28.3.3 The Share Class Hedging Charge is calculated and taken into account daily and paid fortnightly on the same basis as described at 28.1.3 and 28.1.4 for the Annual Management Charge.
28.3.4 If the cost of providing share class hedging services to the Sub-fund is more than the Share Class Hedging Charge taken in any period, the ACD will make up the difference. If the cost of providing share class hedging services to the Company is less than the Share Class Hedging Charge taken in any period, the ACD will keep the difference.
28.4 The Depositary’s Charges and Expenses
28.4.1 The Depositary takes a charge from each Sub-fund as payment for its duties as depositary. This is called the Depositary’s Charge.
28.4.2 The Depositary’s Charge is based on the Net Asset Value of each Sub-fund, and is charged on a sliding scale as follows:
Percentage charge per annum Net Asset value 0.0075% First £150 million 0.005% Next £500 million 0.0025% Balance above £650 million
This sliding scale is agreed between the ACD and the
Depositary and may be changed. If it does change, the
ACD will inform you in accordance with the COLL Sourcebook.
28.4.3 The Depositary’s Charge is calculated and taken into account daily and is paid fortnightly to the Depositary on the same basis as described at 28.1.3 and 28.1.4 for the Annual Management Charge.
2 8.4.4 The Depositary may also make a charge for its services in relation to:
• distributions,
• the provision of banking services,
• holding money on deposit,
• lending money,
• engaging in stock lending, derivative or unsecured loan transactions,
• the purchase or sale, or dealing in the purchase or sale of, Scheme Property,
provided that the services are in accordance with the provisions of the COLL Sourcebook.
28.4.5 The Depositary is also entitled to payment and reimbursement of all costs, liabilities and expenses it incurs in the performance of, or in arranging the performance of, functions conferred on it by the Instrument of Incorporation, the COLL Sourcebook or by general law. Such expenses generally include, but are not restricted to:
• delivery of stock to the Depositary or custodian;
• collection and distribution of income and capital;
• submission of tax returns and handling tax claims;
• such other duties as the Depositary is permitted or required by law to perform.
28.5 Custody Charges
28.5.1 The Depositary is entitled to be paid a Custody Charge in relation to the safe-keeping of each Sub-fund’s assets (“custody”).
28.5.2 The Custody Charge is variable depending upon the specific custody arrangements for each type of asset. The Custody Charge is a range between 0.00005% and 0.40% of the asset values per annum.
28.5.3 The Custody Charge is taken into account daily in each Share Class’s price. It is calculated each month using the value of each asset type and it is paid to State Street Bank and Trust Company when it invoices the Sub-fund.
28.6 Custody Transaction Charges
28.6.1 The Depositary is also entitled to be paid Custody Transaction Charges in relation to processing transactions in each Sub-fund’s assets.
28.6.2 The Custody Transaction Charges vary depending on the country and the type of transaction involved. The Custody Transaction Charges generally range between £4 and £75 per transaction.
28.6.3 The Custody Transaction Charges are taken into account daily in each Share Class’s price. It is calculated each month based on the number of transactions that have taken place and it is paid to State Street Bank and Trust Company when it invoices the Sub-fund.
28.7 Other Expenses
28.7.1 The costs and expenses relating to the authorisation and incorporation and establishment of the Company, the offer of Shares, the preparation and printing of this Prospectus
and the fees of the professional advisers to the Company in connection with the offer will be borne by the ACD.
28.7.2 The direct establishment costs of each Sub-fund formed, or Share Class created, may be borne by the relevant Sub- fund or by the ACD at its discretion.
28.7.3 The Company may pay out of the property of the Company charges and expenses incurred by the Company unless they are covered by the Administration Charge. These include the following expenses:
28.7.3.1 reimbursement of all out of pocket expenses incurred by the ACD in the performance of its duties;
28.7.3.2 broker’s commission, taxes and duties (including stamp duty), and other disbursements which are necessarily incurred in effecting transactions for the Sub-funds;
28.7.3.3 any fees or expenses of any legal or other professional adviser of the Company;
28.7.3.4 any costs incurred in respect of meetings of Shareholders convened on a requisition by Shareholders but not those convened by the ACD or an associate of the ACD;
28.7.3.5 liabilities on unitisation, amalgamation or reconstruction including certain liabilities arising after transfer of property to the Sub- funds in consideration for the issue of Shares as more fully detailed in the Regulations;
28.7.3.6 interest on borrowing and charges incurred in effecting or terminating such borrowing or in negotiating or varying the terms of such borrowing on behalf of the Sub-funds;
28.7.3.7 taxation and duties payable in respect of the property of the Sub-funds or of the issue or redemption of Shares ;
28.7.3.8 the audit fees of the Auditor (including value added tax) and any expenses of the Auditor;
28.7.3.9 if the Shares are listed on any stock exchange, the fees connected with the listing (though none of the Shares are currently listed); and,
28.7.3.10 any value added or similar tax relating to any charge or expense set out herein.
28.7.4 The cost and expenses relating to research services provided to the Investment Manager by brokers, or independent research providers, will be borne by the Investment Manager.
28.8 Allocation of charges
For each Share Class, the charges and expenses described in this section are either charged to capital or income (or both) depending upon whether they are Income Shares or Accumulation Shares. For Income Shares, most charges and expenses are charged to capital. This treatment of the charges and expenses may increase the amount of income available for distribution to Shareholders in the Share Class concerned, but it may constrain capital growth. For Accumulation Shares, most charges and expenses are paid from income. If there is insufficient income to fully pay those charges and expenses, the residual amount is taken from capital.
Appendix 1 and Appendix 4 detail which charges and expenses are taken from income or capital for each Sub-fund’s Income and Accumulation Shares.
29 Stock lending
29.1 The Company or the Depositary at the request of the Company, may enter into certain stocklending arrangements in respect of the Company or a Sub-fund. The Company or the Depositary delivers securities which are the subject of the stocklending arrangement in return for an agreement that securities of the same kind and amount should be redelivered to the Company or the Depositary at a later date. The Company or the Depositary at the time of delivery receives collateral to cover the risk of the future redelivery not being completed. There is no limit on the value of the property of the Company which may be the subject of stocklending arrangements.
29.2 Stocklending arrangements must be an arrangement of the kind described in Section 263B of the Taxation of Chargeable Gains Xxx 0000. The arrangements must also comply with the requirements of the Regulations.
30 Shareholder meetings and voting rights
30.1 Annual General Meeting
In accordance with the provisions of the Open-Ended Investment Companies (Amendment) Regulations 2005, the Company has elected not to hold annual general meetings.
30.2 Requisitions of Meetings
30.2.1 The ACD or the Depositary may requisition a general meeting at any time.
30.2.2 Shareholders may also requisition a general meeting of the Company. A requisition by Shareholders must state the objects of the meeting, be dated, be signed by Shareholders who, at the date of the requisition, are registered as holding not less than one-tenth in value of all Shares then in issue and the requisition must be deposited at the head office of the Company. The ACD must convene a general meeting no later than eight weeks after receipt of such requisition.
30.3 Notice and Quorum
Shareholders will receive at least 14 days notice of a Shareholders’ meeting (other than an adjourned meeting where a shorter period of notice can apply) and are entitled to be counted in the quorum and vote at such meeting either in person or by proxy. If after a reasonable time from the time set for an adjourned meeting there are not two Shareholders present in person or by proxy, the quorum for the adjourned meeting shall be one person entitled to be counted in a quorum and present at the meeting.. Notices of meetings and adjourned meetings will normally be given in writing to the Shareholder’s registered addresses (or, at the discretion of the ACD, such other address which we may hold for the purposes of correspondence).
30.4 Voting Rights
30.4.1 At a meeting of Shareholders, on a show of hands every Shareholder who (being an individual) is present in person or (being a corporation) is present by its representative properly authorised in that regard, has one vote.
30.4.2 On a poll vote, a Shareholder may vote either in person or by proxy. The voting rights attaching to each Share are such proportion of the voting rights attaching to all the Shares in issue that the price of the Share bears to the aggregate price(s) of all the Shares in issue as at a cut-off date selected by the ACD which is a reasonable time before the notice of meeting is deemed to have been served.
30.4.3 A Shareholder entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
30.4.4 Except where the Regulations or the Instrument of Incorporation of the Company require an extraordinary
resolution (which needs 75% of the votes cast at the meeting to be in favour for the resolution to be passed) any resolution required will be passed by a simple majority of the votes validly cast for and against the resolution.
30.4.5 The ACD may not be counted in the quorum for a meeting and neither the ACD nor any associate (as defined in the Regulations) of the ACD is entitled to vote at any meeting of the Company except in respect of Shares which the ACD or associate holds on behalf of or jointly with a person who, if the registered Shareholder, would be entitled to vote and from whom the ACD or associate has received voting instructions.
30.4.6 ‘Shareholders’ in this context of this section 31 means Shareholders as at a cut-off date selected by the ACD which is a reasonable time before the notice of the relevant meeting was deemed to have been served but excludes holders of Shares who are known to the ACD not to be Shareholders at the time of the meeting.
30.4.7 Investors using the M&G Securities International Nominees Service whose holdings are registered through M&G International Investments Nominees Limited will be offered a vote at general meetings when the ACD considers, at its sole discretion, that the investors’ interests may be materially affected.
30.5 Class and Sub-fund Meetings
The above provisions, unless the context otherwise requires, apply to class meetings and meetings of Sub-funds as they apply to general meetings of Shareholders.
30.6 Variation of Class Rights
The rights attached to a class may not be varied unless done so pursuant to the notification requirements of COLL 4.3R.
31 Taxation
31.1 General
The information given under this heading does not constitute legal or tax advice and prospective investors should consult their own professional advisers about the implications of subscribing for, buying, holding, exchanging, selling or otherwise disposing of Shares under the laws of the jurisdiction in which they may be subject to tax.
The statements below are only intended as a general summary of UK tax law and practice as at the date of this Prospectus and may change in the future. Any investor who is in any doubt as to their UK tax position in relation to a Sub-fund should consult a UK professional adviser.
31.2 Taxation of the Company
31.2.1 Income
Each Sub-fund will be liable to corporation tax on its taxable income less expenses at the lower rate of income tax (currently 20%).
31.2.2 Capital gains
Capital gains accruing to a Sub-fund will be exempt from UK tax.
31.3 Distributions
Sub-funds with over 60% invested in qualifying assets (broadly interest paying) throughout the relevant distribution period can elect to make interest distributions. It is the ACD’s current intention that the M&G Corporate Bond Fund, the M&G Emerging Markets Bond Fund, the M&G European Corporate Bond Fund, the M&G European High Yield Bond Fund, and the M&G Global Government Bond Fund will be managed in such a way that they will be able to make interest distributions. In all other cases they will pay dividend distributions.
31.4 Taxation of the investor
31.4.1 Dividend distributions - UK resident individual shareholders
From April 2016 UK dividends are subject to a £5,000 tax- free dividend allowance for all taxpayers. For dividend income in excess of this allowance, the applicable tax rate for basic rate taxpayers is 7.5%, the rate for higher rate taxpayers is 32.5% and the rate for additional taxpayers is 38.1%. The tax-free dividend allowance will be reduced to
£2,000 from April 2018.
31.4.2 Dividend distributions – UK resident corporate shareholders
For UK resident corporate Shareholders, any dividend distributions will be divided into that part which relates to UK dividend income of the Fund, and that part which relates to other income. The part relating to dividend income is generally not taxable.. The other part is taxable as if it were an annual payment and is subject to corporation tax. The taxable part of the distribution is deemed to have been paid net of an income tax deduction of 20% which can be offset against a shareholder’s liability to corporation tax and may be recoverable. The tax voucher will show the ratio between the part relating to UK dividend income (franked investment income) and the part relating to taxable annual payments and also shows, in terms of a pence per share rate, the tax which can be recovered. The maximum amount of income tax if any, that may be reclaimed from HM Revenue & Customs is the corporate Shareholder’s proportion of the Shareholder’s non-foreign deemed income tax.
31.4.3 Interest distributions
These are currently paid without deduction of income tax.
From April 2016 a Personal Savings Allowance has been introduced where the first £1,000 of savings income is exempt from tax for basic rate taxpayers and the first £500 for higher rate taxpayers. However, UK funds needed to continue withholding tax on interest distributions until April 2017. After this date, interest distributions could be paid without a deduction of income tax at the rate of 20% for net shares.
UK resident corporate Shareholders should note that where they hold a fund which makes interest distributions, gains will be subject to loan relationship rules.
31.4.4 Capital gains
Profits arising on disposal of shares are subject to capital gains tax. However, if the total gains from all sources realised by an individual shareholder in a tax year, after deducting allowable losses, are less than the annual exemption, there is no capital gains tax to apply. Where income equalisation applies (see below), the buying price of Shares includes accrued income which is repaid to the investor with the first allocation of income following the purchase. This repayment is deemed to be a repayment of capital and is therefore made without deduction of tax but must be deducted from the investor’s base cost of the relevant Shares for purposes of calculating any liability to capital gains tax.
Where over 60% of the investments of a Sub-fund are interest-bearing or economically equivalent investments, the Shareholdings of UK resident corporate Shareholders will generally be subject to the loan relationships regime.
32 Income equalisation
32.1 Income equalisation will be applied to Shares issued by the Company.
32.2 Part of the purchase price of a Share reflects the relevant share of accrued income received or to be received by the Company. This capital sum is returned to a Shareholder with the first allocation of income in respect of a Share issued during the relevant accounting period.
32.3 The amount of income equalisation is calculated by dividing the aggregate of the amounts of income included in the price of Shares issued to or bought by Shareholders in an annual or interim accounting period (see paragraph 34.1) by the number of those Shares and applying the resultant average to each of the Shares in question.
33 Winding up of the Company or a Sub-fund of the Company
33.1 The Company shall not be wound up except as an unregistered company under Part V of the Xxxxxxxxxx Xxx 0000 or under the Regulations. A Sub-fund may only be wound up under the Regulations.
33.2 Where the Company or a Sub-fund is to be wound up under the Regulations, such winding up may only be commenced following approval by the FCA. The FCA may only give such approval if the ACD provides a statement (following an investigation into the affairs of the Company) either that the Company will be able to meet its liabilities within 12 months of the date of the statement or that the Company will be unable to do so.
33.3 The Company or a Sub-fund may be wound up under the Regulations if:
33.3.1 an extraordinary resolution to that effect is passed by Shareholders; or
33.3.2 the period (if any) fixed for the duration of the Company or a particular Sub-fund by the Instrument of Incorporation expires, or the event (if any) occurs on the occurrence of which the Instrument of Incorporation provides that the Company or a particular Sub-fund is to be wound up (for example, if the share capital of the Company is below its prescribed minimum or (in relation to any Sub-fund) the Net Asset Value of the Sub-fund is less than £10,000,000, or if a change in the laws or regulations of any country means that, in the ACD’s opinion, it is desirable to terminate the Sub-fund); or
33.3.3 on the date of effect stated in any agreement by the FCA to a request by the ACD for the revocation of the authorisation order in respect of the Company or the Sub- fund.
33.4 On the occurrence of any of the above:
33.4.1 Regulations 6.2, 6.3 and 5 relating to Dealing, Valuation and Pricing and Investment and Borrowing will cease to apply to the Company or the Sub-fund;
33.4.2 the Company will cease to issue and cancel Shares in the Company or the Sub-fund and the ACD shall cease to sell or redeem Shares or arrange for the Company to issue or cancel them for the Company or the Sub-fund;
33.4.3 no transfer of a Share shall be registered and no other change to the register shall be made without the sanction of the ACD;
33.4.4 where the Company is being wound up, the Company shall cease to carry on its business except in so far as it is beneficial for the winding up of the Company;
33.4.5 the corporate status and powers of the Company and, subject to the provisions of Clauses 33.4.1 and 33.4.2 above, the powers of the ACD shall remain until the Company is dissolved.
33.5 The ACD shall, as soon as practicable after the Company or the Sub-fund falls to be wound up, realise the assets and meet the
liabilities of the Company or the Sub-fund and, after paying out or retaining adequate provision for all liabilities properly payable and retaining provision for the costs of winding up, arrange for the Depositary to make one or more interim distributions out of the proceeds to Shareholders proportionately to their rights to participate in the scheme property of the Company or the Sub-fund. When the ACD has caused all of the scheme property to be realised and all of the liabilities of the Company or the Sub-fund to be realised, the ACD shall arrange for the Depositary also to make a final distribution to Shareholders as at (or prior to) the date on which the final account is sent to Shareholders of any balance remaining, if applicable, in proportion to their holdings in the Company or the Sub-fund.
33.6 On completion of a winding up of the Company, the Company will be dissolved and any money which is legitimately the property of the Company (including unclaimed distributions) and standing to the account of the Company, will be paid into court within one month of dissolution.
33.7 Following the completion of the winding up of the Company or the Sub-fund, the ACD shall provide written confirmation to the Registrar of Companies and shall notify the FCA that it has done so.
33.8 Following the completion of a winding up of either the Company or a Sub-fund, the ACD must prepare a final account showing how the winding up took place and how the scheme property was distributed. The auditor of the Company shall make a report in respect of the final account stating their opinion as to whether the final account has been properly prepared. This final account and the auditor’s report must be sent to the FCA, to each Shareholder and, in the case of the winding up of the Company, to the Registrar of Companies within two months of the termination of the winding up.
33.9 As the Company is an umbrella company, any liabilities attributable or allocated to a Sub-fund under the Regulations shall be met out of the scheme property attributable or allocated to that Sub-fund.
33.10 Any assets and liabilities, expenses, costs and charges not attributable to a particular Sub-fund may be allocated by the Manager in a manner which it believes is fair to the Shareholders generally. This will normally be pro-rata to the Net Asset Value of the relevant Sub-funds.
33.11 Shareholders in a particular Sub-fund are not liable for the debts of the Company or any Sub-fund in the Company. A Shareholder is not liable to make any further payment to the Sub-fund after he has paid in full for the purchase of Shares.
34 General Information
34.1 Accounting Periods
The accounting period of the Company ends each year on 30 June (the accounting reference date). The half-yearly accounting period ends each year on 31 December.
34.2 Income Allocations
34.2.1 Allocations of income are made in respect of the income available for allocation in each annual accounting period and, for certain Sub-funds, each interim accounting period (see Appendices 1 and 4).
34.2.2 Distributions of income for each Sub-fund are paid on or before the annual income allocation date of 31 October and where applicable on or before one or more of the interim allocation dates of 31 January, 30 April and 31 July in each year.
34.2.3 If a distribution remains unclaimed for a period of six years after it has become due, it will be forfeited and will revert to the Company.
34.2.4 The amount available for allocation in any accounting period is calculated by taking the aggregate of the income received or receivable for the account of the relevant Sub-
fund in respect of that period, and deducting the charges and expenses of the relevant Sub-fund paid or payable out of income in respect of that accounting period. The ACD then makes such other adjustments as it considers appropriate (and after consulting the auditor as appropriate) in relation to taxation, income equalisation, income unlikely to be received within 12 months following the relevant income allocation date, income which should not be accounted for on an accrual basis because of lack of information as to how it accrues, transfers between the income and capital account and any other adjustments which the ACD considers appropriate after consulting the auditor.
The amount initially deemed available in respect of any one class of Share may be reduced if the income attributed to another class of Share in the same Sub-fund is less than the charges applicable to that class of Share.
34.2.5 Income from debt securities is recognised on an effective yield basis. Effective yield is an income calculation that takes account of amortisation of any discount or premium on the purchase price of the debt security over the remaining life of the security.
34.2.6 Distributions made to the first named joint Shareholder are as effective a discharge to the Company and the ACD as if the first named Shareholder had been a sole Shareholder.
34.2.7 Income produced by the Sub-fund’s investments accumulates during each accounting period. If, at the end of the accounting year, income exceeds expenses, the net income of the Sub-fund is available to be distributed to Shareholders. In order to conduct a controlled dividend flow to Shareholders, interim distributions will be, at the investment manager’s discretion, up to a maximum of the distributable income available for the period. All remaining income is distributed in accordance with the Regulations.
34.2.8 Where a Sub-fund does not issue Accumulation Shares, a shareholder may choose to have the income reinvested to purchase further shares of that Sub-fund. Where the reinvestment of income has been permitted, the ACD will waive any initial charge due on such re-investment. Re- investment of allocations of income is made fourteen days before the relevant income allocation date.
34.3 Annual Reports
34.3.1 Annual reports of the Company are published within four months of each annual accounting period and half-yearly reports are published within two months of each half-yearly accounting period and are available to Shareholders on request. Shareholders will receive copies of the annual and half-yearly short reports on publication.
34.3.2 The accounts of Sub-funds presented within annual and half-yearly reports will be shown in the currency in which that Sub-fund is valued. The Valuation Currency of each Sub-fund is listed in Appendices 1 and 4.
34.4 Documents of the Company
34.4.1 The following documents may be inspected free of charge between 9.00 am and 5.00 pm UK time every Dealing Day at the offices of the ACD at Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX:
34.4.1.1 the most recent annual and half-yearly reports of the Company;
34.4.1.2 the Instrument of Incorporation (and any amending instrument of incorporation).
34.4.1.3 Shareholders may obtain copies of the above documents from the above addresses. The ACD may make a charge at
its discretion for copies of certain documents;
34.5 Risk Management and Other Information
The following information is available from the ACD on request;
34.5.1 Information on the risk management methods used in relation to the Sub-funds, the quantitative limits which apply to that risk management and any developments in the risk and yields of the main categories of investment.
34.5.2 Execution Policy
The Investment Manager’s execution policy sets out the basis upon which the ACD will effect transactions and place orders in relation to the Company whilst complying with its obligations under the FCA Handbook to obtain the best possible result for the ACD on behalf of the Company.
34.5.3 Exercise of voting rights
A description of the Investment Manager’s strategy for determining how voting rights attached to ownership of Scheme Property are to be exercised for the benefit of each sub-Fund. Details of action taken in respect of the exercise of voting rights are also available.
34.5.4 Gifts and Hospitality
The ACD and the Investment Manager may provide or receive hospitality or small business gifts from intermediaries who sell their products, operators of other collective investment schemes in which they invest, or other counterparties with whom we deal. The hospitality is typically a meal or attendance at a social engagement where the opportunity exists for participants to discuss business issues such as market developments or the ACD’s and the Investment Manager’s products. The ACD and the Investment Manager may also provide assistance, such as providing a speaker, or paying towards materials used at a business training event or a conference organised by or for such firms. Such gifts and hospitality are in no way predicated on past, current, or future business activity. The ACD’s and the Investment Manager’s procedures place controls on such arrangements to ensure that there is no Shareholder disadvantage. Our normal limits per individual events/items are £200 for hospitality and £100 for gifts per individual concerned.
34.6 Management of collateral
In the context of OTC financial derivatives transactions and efficient portfolio management techniques, each Sub-fund may receive collateral with a view to reduce its counterparty risk. This section sets out the collateral management applied by the Sub-funds in such cases.
34.6.1 Eligible collateral
Collateral received by the Sub-funds may be used to reduce their counterparty risk exposure if it complies with the criteria set out in regulation notably in terms of liquidity, valuation, issuer credit quality, correlation, risks linked to the management of collateral and enforceability.
In particular, collateral should comply with the following conditions:
34.6.1.1 Any collateral received other than cash should be of high quality, highly liquid and traded on a regulated market or multilateral trading facility with transparent pricing in order that it can be sold quickly at a price that is close to pre-sale valuation;
34.6.1.2 It should be valued on at least a daily basis and assets that exhibit high price volatility
should not be accepted as collateral unless suitably conservative haircuts are in place;
34.6.1.3 It should be issued by an entity that is independent from the counterparty and is expected not to display a high correlation with the performance of the counterparty;
34.6.1.4 It should be sufficiently diversified in terms of country, markets and issuers with a maximum exposure of 20% of the Sub- Funds’ net asset value to any single issuer on an aggregate basis, taking into account all collateral received;
34.6.1.5 It should be capable of being fully enforced by the Sub-Funds at any time without reference to or approval from the counterparty.
Subject to the abovementioned conditions, collateral received by the Sub-Funds may consist of:
34.6.1.6 liquid assets such as cash and cash equivalents, including short-term bank certificates and Money Market Instruments;
34.6.1.7 bonds issued or guaranteed by a Member State of the OECD or by their local public authorities or by supranational institutions and undertakings with EU, regional or worldwide scope ;
34.6.1.8 shares or units issued by money market Collective investment Schemes calculating a daily NAV and being assigned a rating of AAA or its equivalent ;
34.6.1.9 shares or units by UCITS investing mainly in bonds/shares mentioned in 34.6.1.10 and 34.6.1.11 below,
34.6.1.10 bonds issued or guaranteed by first class issuers offering an adequate liquidity; and
34.6.1.11 shares admitted to or dealt in on a regulated market of an EU Member State or on a stock exchange of a member state of the OECD, on the condition that these shares are included in a main index.
A reinvestment of cash provided as collateral may only be effected where in compliance with the respective regulations.
34.6.2 Level of collateral
Each Sub-fund will determine the required level of collateral for OTC financial derivatives transactions and efficient portfolio management techniques by reference to the applicable counterparty risk limits and taking into account the nature and characteristics of transactions, the creditworthiness and identity of counterparties and prevailing market conditions.
34.6.3 OTC financial derivative transactions
The Investment Manager will generally require the counterparty to an OTC derivative to post collateral in favour of the Sub-fund representing, at any time during the lifetime of the agreement, up to 100% of the Sub-fund’s exposure under the transaction.
34.6.4 Haircut policy
Collateral acceptability and haircuts will depend on a number of factors including the asset pool available to the Sub-fund for posting as well as the asset types acceptable to the Sub-fund when receiving collateral, but will as a rule
be of high quality, liquid and not display significant correlation with the counterparty under normal market conditions.
The taking of collateral is intended as a hedge against default risk, with haircuts seen as hedging the risk on that collateral. From this point of view, haircuts are an adjustment to the quoted market value of a collateral security to take account of the unexpected loss that may be faced due to the difficulty in realising that security in response to a default by the counterparty. By applying a haircut, the quoted market value of a collateral security is translated into a probable future liquidation or restoration value.
To this end therefore the haircuts that are applied are the
34.7 Notices
receives. Such a loss may arise due to a decline in the value of the investment made with cash collateral received. A decline in the value of such investment of the cash collateral would reduce the amount of collateral available to be returned by the Sub-fund to the counterparty at the conclusion of the transaction. The Sub-fund would be required to cover the difference in value between the collateral originally received and the amount available to be returned to the counterparty, thereby resulting in a loss to the Sub-fund.
result of a view of the credit and liquidity risk of the collateral and will become more “aggressive” depending on the asset type and maturity profile.
As at the date of this Prospectus, the Investment Manager typically accepts the following collateral types and applies the following haircuts in relation thereto:
Collateral type Typical haircut
Cash 0%
Government Bonds 1% to 20%
Corporate Bonds 1% to 20%
The Investment Manager reserves the right to depart from the above haircut levels where it would be appropriate to do so, taking into account the assets’ characteristics (such as the credit standing of the issuers, the maturity, the currency and the price volatility of the assets). Furthermore, the Investment Manager reserves the right to accept collateral types other than those disclosed above.
No haircut will generally be applied to cash collateral.
34.6.5 Reinvestment of collateral
Non-cash collateral received by the Fund on behalf of a Sub-Fund cannot be sold, reinvested or pledged, except where and to the extent permissible under regulations.
Cash collateral received by the Sub-Funds can only be:
34.6.5.1 placed on deposit with credit institutions which have their registered office in an EU Member State or, if their registered office is located in a third-country, are subject to prudential rules considered by the FCA as equivalent to those laid down in EU law;
34.6.5.2 invested in high-quality government bonds;
34.6.5.3 used for the purpose of reverse repo transactions provided the transactions are with credit institutions subject to prudential supervision and the relevant Sub-Fund is able to recall at any time the full amount of cash on accrued basis; and/or
34.6.5.4 invested in short-term money market funds as defined in the ESMA Guidelines on a common definition of European Money Market Funds.
Any reinvestment of cash collateral should be sufficiently diversified in terms of country, markets and issuers with a maximum exposure, on an aggregate basis, of 20% of the Sub-fund’s Net Asset Value to any single issuer. The Sub-fund may incur a loss in reinvesting the cash collateral it
Notices to Shareholders will normally be given in writing to the Shareholder’s registered address (or, at the discretion of the ACD, such other address which we may hold for the purposes of correspondence).
35 Complaints
If you wish to complain about any aspect of the service you have received or to request a copy of M&G’s complaints handling procedures, please contact M&G Customer Relations, XX Xxx 0000, Xxxxxxxxxx XX00 0XX. If your complaint is not dealt with to your satisfaction, you can then complain to: The Financial Xxxxxxxxx Xxxxxxx (XXX), Xxxxxxxx Xxxxx, Xxxxxx, X00 0XX.
36 Preferential Treatment
36.1 From time to time the ACD may afford preferential terms of investment to certain groups of investors. In assessing whether such terms are afforded to an investor, the ACD will ensure that any such concession is not inconsistent with its obligation to act in the overall best interests of the relevant sub-fund and its investors. In particular, the ACD may typically exercise its discretion to waive the initial charge, or redemption charge, or investment minima for investment in a Class for investors that are investing sufficiently large amounts, either initially or are anticipated to do so over time, such as platform service providers and institutional investors including fund of fund investors. The ACD may also have agreements in place with such groups of investors which result in them paying a reduced annual management charge. Additionally, the ACD may grant similar preferential terms to the employees of companies within the Prudential Group of companies or their associates.
37 Tax Reporting
37.1 The UK has implemented the Foreign Account Tax Compliant Act (FATCA) and the OECD Standard for Automatic Exchange of Financial Account Information through the International Tax Compliance Regulations 2015. In order to fulfill our obligations, we are required to obtain certification of certain tax information from Shareholders which includes (but not limited to) tax residency, tax identification number, and tax status classification of corporate Shareholders. If certain conditions apply or if required information is not provided to us, information about your M&G shareholding may be passed to HM Revenue & Customs in order to be passed on to other tax authorities.
38 Marketing outside the UK
38.1 The Company’s Shares are marketed outside the UK. Paying agents in countries other than the UK where Shares are registered for retail sale may charge investors for their services.
38.2 The Shares in the Sub-funds have not been and will not be registered under the United States Securities Act of 1933, as amended, or registered or qualified under the securities laws of any state of the United States and may not be offered, sold, transferred or delivered, directly or indirectly, to any investors within the United States or to, or for the account of, US Persons except in certain
limited circumstances pursuant to a transaction exempt from such registration or qualification requirements. None of the Shares have been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Shares or the accuracy or adequacy of the prospectus. The Sub- funds will not be registered under the United States Investment Company Act of 1940, as amended.
39 Markets for the Sub-funds
The Sub-funds are marketable to all retail investors.
40 Genuine diversity of ownership
40.1 Shares in the Company are and will continue to be widely available. The intended categories of investors are retail and institutional investors.
40.2 Shares in the Company are and will continue to be marketed and made available widely to reach the intended categories of investors and in a manner appropriate to attract those categories of investors.
41 Remuneration policy
The ACD applies a staff remuneration policy consistent with the principles outlined in the Undertakings for Collective Investment in Transferable Securities Directive (UCITS) (No. 2009/65/EC), as amended, the Alternative Investment Fund Managers Directive (AIFMD) (No. 2011/61/EU), as amended, and the FCA Handbook of Rules and Guidance. The remuneration policy is overseen by a remuneration committee and is designed to promote sound and effective risk management by, amongst other things:
- identifying staff with the ability to have a material impact on the risk profile of either the ACD or the Funds;
- ensuring that the remuneration of those staff is in line with the risk profiles of the ACD and of the Funds, and that any relevant conflicts of interest are appropriately managed at all times;
- setting out the link between pay and performance for all of the ACD’s employees, including the terms of annual bonus and long- term incentive plans and individual remuneration packages for Directors and other senior employees.
Please visit the following website: xxxx://xxx.xxxxx.xxx/xx/xxxxxxxxx/xxxxx-xx/xxx-xxxxxx/ for up- to-date details of the remuneration policy, including, but not limited to:
- a description of how remuneration and benefits are calculated;
- the identities of persons responsible for awarding the remuneration, and,
- the composition of the remuneration committee
Alternatively, a paper copy can be obtained from our Customer Relations Department free of charge on 0800 390 390.
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | ||
General risks | Risk warning | |||||||||
Risk to capital & Income will vary | The investments of the Sub-fund are subject to normal market fluctuations and other risks inherent in investing in shares, bonds and other stock market related assets. These fluctuations may be more extreme in periods of market disruption and other exceptional events. There can be no assurance that any appreciation in value of investments will occur or that the investment objective will actually be achieved. The value of investments and the income from them will fall as well as rise and investors may not recoup the original amount they invested. Past performance is not a guide to future performance. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Charges to Capital – Income Shares | The charges and expenses attributable to the Sub-Fund’s Income Shares are taken from capital, in whole or in part, and as a result, capital growth for that share class will be constrained. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Counterparty Risk | Whilst the Investment Manager will place transactions, hold positions (including derivatives transactions) and deposit cash with a range of counterparties, there is a risk that a counterparty may default on its obligations or become insolvent, which may put the Sub-fund's capital at risk. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Liquidity Risk | The Sub-fund’s investments may be subject to liquidity constraints which means that securities may trade infrequently and in small volumes. Normally liquid securities may also be subject to periods of significantly lower liquidity in difficult market conditions. As a result, changes in the value of investments may be more unpredictable and in certain cases, it may be difficult to deal a security at the last market price quoted or at a value considered to be fair. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Suspension of dealing in shares | Investors are reminded that in exceptional circumstances their right to sell or redeem Shares may be temporarily suspended. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Cancellation Risks | When cancellation rights are applicable and are exercised, the full amount invested may not be returned if the price falls before we are informed of your intention to cancel. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Inflation | A change in the rate of inflation will affect the real value of your investment. | ✓ ✓ | ✓ | ✓ | ✓ | ✓ ✓ | ✓ | |||
Taxation | The current tax regime applicable to investors in collective investment schemes in their country of residence or domicile and the UK schemes themselves is not guaranteed and may be subject to change. Any changes may have a negative impact on returns received by investors. The M&G Funds rely extensively on tax treaties to reduce domestic rates of withholding tax in countries where it invests. A risk exists that tax authorities in countries with which the United Kingdom has double tax treaties, may change their position on the application of the relevant tax treaty. As a consequence, higher tax may be suffered on investments, (e.g. as a result of the imposition of withholding tax in that foreign jurisdiction). Accordingly, any such withholding tax may impinge upon the returns to the Sub-fund and investors. In specific treaties which contain ‘limitation of benefits’ provisions (e.g. US), the tax treatment of the Sub-fund may be affected by the tax profiles of investors in the fund as such treaties may require the majority of investors in the fund to be from the same jurisdiction. Failing to meet the limitation of benefits provision may result in increased withholding tax being suffered by the Sub-fund. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Tax developments | The tax regulations which M&G Sub-funds are subject to constantly change as a result of: (i) technical developments – changes in law regulations; (ii) interpretative developments – changes in the way tax authorities apply law and (iii) market practice – whilst tax law is in place, there may be difficulties applying the law in practice (e.g. due to operational constraints). Any changes to the tax regimes applicable to M&G Funds and investors in their country of residence or domicile may impact negatively on the returns received by investors. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Like other business enterprises, the use of the internet and other electronic media and technology exposes M&G Funds, its service providers, and their respective operations, to potential risks from cyber-security attacks or incidents (collectively, “cyber-events”). Cyber-events may include, for example, unauthorised access to systems, networks or devices (such as, for example, through “hacking” activity), infection from computer viruses or other malicious software code, and attacks which shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality. In addition to intentional cyber-events, unintentional cyber-events can occur, such Cyber Event Risk as, for example, the inadvertent release of confidential information. Any cyber-event could adversely impact a Sub-fund and its Shareholders. A cyber-event may cause a Sub-fund, or its service providers to lose proprietary information, suffer data corruption, lose operational capacity (such as, for example, the loss of the ability to process transactions, calculate the Net Asset Value of a Sub-fund or allow Shareholders to transact business) and/or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber-events also may result in theft, unauthorised monitoring and failures in the physical infrastructure or operating systems that support a Sub-fund and its service providers. In addition, cyber-events affecting issuers in which a Sub-fund invests could cause the Sub-fund’s investments to lose value. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | ||||
IF3/30012018/ENG/r01
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | ||
Derivatives | Risk warning | |||||||||
Derivatives EPM only | The Sub-fund may enter into derivative transactions for the purposes of Efficient Portfolio Management (‘EPM’), including hedging transactions and temporary short term tactical asset allocation, e.g. for the purposes of preserving the value of an asset or assets of the Sub-fund and liquidity management purposes (i.e. to enable the Sub-fund to be adequately invested). The Risk Management Process document sets out the approved derivative strategies. | ✓ | ✓ | ✓ | ✓ | |||||
Derivatives (sophisticated funds) | The Sub-fund undertakes transactions in derivatives and forward transactions, both on exchange and OTC, for the purposes of meeting the investment objective, protecting the risk to capital, currency, duration and credit management, as well as for hedging. The Risk Management Process document sets out the approved derivative strategies. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Derivatives - Correlation (Basis Risk) | Correlation risk is the risk of loss due to divergence between two rates or prices. This applies particularly where an underlying position is hedged through derivative contracts which are not the same as (but may be similar to) the underlying position. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Derivatives - Valuation | Valuation risk is the risk of differing valuations of derivatives arising from different permitted valuation methods. Many derivatives, in particular non-exchange traded OTC derivatives, are complex and often valued subjectively and the valuation can only be provided by a limited number of market professionals who are often also the counterparty to the transaction. As a result, the daily valuation may differ from the price that can actually be achieved when trading the position in the market. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Derivatives - Liquidity | Liquidity risk exists when a particular instrument is difficult to purchase or sell. Derivative transactions that are particularly large, or traded off market (i.e. OTC), may be less liquid and therefore not readily adjusted or closed out. Where it is possible to buy or sell, this may be at a price that differs from the price of the position as reflected in the valuation. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Derivatives - Counterparty | Certain derivative types may require the establishment of a long term exposure to a single counterparty which increases the risk of counterparty default or insolvency. While these positions are collateralised, there is a residual risk between both the mark to market and the receipt of the corresponding collateral as well as between the final settlement of the contract and the return of any collateral amount. This risk is referred to as daylight risk. In certain circumstances, the physical collateral returned may differ from the original collateral posted. This may impact the future returns of the Sub-fund. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Derivatives - Delivery | The Sub-fund’s ability to settle derivative contracts on their maturity may be affected by the level of liquidity in the underlying asset. In such circumstances, there is a risk of loss to the Sub-fund. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Derivatives – Legal Risk | Derivative transactions are typically undertaken under separate legal arrangements. In the case of OTC derivatives, a standard International Swaps and Derivatives Association ("ISDA") agreement is used to govern the trade between the Sub-fund and the counterparty. The agreement covers situations such as a default of either party and also the delivery and receipt of collateral. As a result, there is a risk of loss to the Sub-Fund where liabilities in those agreements are challenged in a court of law. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
No material impact on Risk profile or volatility. Derivatives - Volatility | It is not intended nor anticipated that the use of these derivative instruments will have a material impact on the risk profile or volatility of the Sub-fund. Extreme market events, counterparty default or insolvency may, however, result in loss to the Sub-fund. | ✓ | ✓ | ✓ | ✓ | |||||
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | ||
Derivatives | Risk warning | |||||||||
Derivatives - Volatility | Derivatives may be used in a limited way to obtain exposure to investments rather than holding the investments directly. It is anticipated that the use of derivatives will not materially alter the risk profile of the Sub-fund or increase price fluctuations compared to equivalent funds that do not invest in derivatives. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Limited Credit Leverage | Derivatives may be used in a limited way to generate credit exposure to investments exceeding the net asset value of the Sub-fund, thereby exposing the Sub-fund to a higher degree of risk. As a result of increased market exposure, the size of any positive or negative movement in markets will have a relatively larger effect on the net asset value of the Sub-fund. The additional credit exposure will however be limited to such an extent as to not materially increase the overall volatility of the net asset value. | ✓ | ||||||||
Short Sales | The Sub-fund may take short positions through the use of derivatives which are not backed by equivalent physical assets. Short positions reflect an investment view that the price of the underlying asset is expected to fall in value. Accordingly, if this view is incorrect and the asset rises in value, the short position could involve losses of the Sub-fund's capital due to the theoretical possibility of an unlimited rise in their market price. However, shorting strategies are actively managed by the Investment Manager such that the extent of the losses will be limited. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Currency Strategies | Funds which use currency management strategies may have substantially altered exposures to currency exchange rates. Should these currencies not perform as the fund Investment Manager expects, the strategy may have a negative effect on performance. | ✓ | ✓ | |||||||
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | ||
Fund Specific | Risk warning | |||||||||
Currency & exchange rate risk | Currency exchange rate fluctuations will impact the value of a Sub-Fund which holds currencies or assets denominated in currencies that differ from the valuation currency of the Sub-fund. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
Currency risk on unhedged share classes | Currency exchange rate fluctuations will impact the value of unhedged share classes where the curreny of the share class differs from that of the valuation currency of the Sub-fund. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
Interest Rate Risk | Interest rate fluctuations will affect the capital and income value of investments within Sub-funds that invest substantially in fixed income investments. This effect will be more apparent if the Sub- fund holds a significant proportion of its portfolio in long dated securities. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Credit Risk | The value of the Sub-fund will fall in the event of the default or perceived increased credit risk of an issuer. This is because the capital and income value and liquidity of the investment is likely to decrease. AAA rated government and corporate bonds have a relatively low risk of default compared to non-investment grade bonds. However, the ratings are subject to change and they may be downgraded. The lower the rating the higher the risk of default. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Zero or Negative yield | The costs of using derivatives to implement a short position within a Sub-fund, for example short positions in currency or Government bonds, may result in a zero or negative yield on the portfolio. In such circumstances the Sub-fund may not make any distributions and any shortfall will be met from capital. | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
Emerging Markets | Securities markets in emerging market countries are generally not as large as those in more developed economies and have substantially less dealing volume which can result in lack of liquidity. Accordingly, where a Sub-fund invests substantially in securities listed or traded in such markets, its net asset value may be more volatile than a fund that invests in the securities of companies in developed countries. Substantial limitations may exist in certain countries with respect to repatriation of investment income or capital or the proceeds of sale of securities to foreign investors or by restriction on investment, all of which could adversely affect the Sub-fund. Many emerging markets do not have well developed regulatory systems and disclosure standards. In addition, accounting, auditing and financial reporting standards, and other regulatory practices and disclosure requirements (in terms of the nature, quality and timeliness of information disclosed to investors) applicable to companies in emerging markets are often less rigorous than in developed markets. Accordingly, investment opportunities may be more difficult to properly assess. Adverse market and political conditions arising in a specific emerging market country may spread to other countries within the region. Political risks and adverse economic circumstances (including the risk of expropriation and nationalisation) are more likely to arise in these markets, putting the value of the investment at risk. These factors may lead to temporary suspension of dealing units in the Sub-fund | ✓ | ✓ | |||||||
Funds investing in a specific countries, regions, sectors and assets classes | Sub-funds investing in specific countries, regions, sectors or asset classes may be more volatile and carry a higher risk to capital than funds investing in a broader investment universe. This is because the former are more vulnerable to market sentiment specific to the country region/sector/asset class in which they invest compared with the latter which may be invested across several regions, sectors and asset classes. | ✓ ✓ | ✓ | ✓ ✓ | ✓ ✓ | |||||
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | ||
Fund Specific | Risk warning | |||||||||
Sub-funds buying Dividends | On occasions, the Investment Manager may make an investment with a view to securing a particular dividend to enhance distributable income. This can act as a constraint on short-term capital performance. | ✓ | ||||||||
Concentrated portfolios | This Sub-fund holds a relatively small number of investments, and as a result, may be more volatile and can be influenced by a small number of large holdings. | ✓ | ✓ | ✓ | ✓ | |||||
Future launch of Hedge Share classes | The ACD may issue hedged Share Classes with market conditions largely dictating the timing of the launch. | ✓ ✓ | ✓ ✓ | ✓ ✓ | ||||||
Hedged Share classes - no segregation of liabilities between share classes in a fund | Gains or losses arising from currency hedging transactions are borne by the Shareholders of the respective hedged Share Classes. Given that there is no segregation of liabilities between Share Classes, there is a risk that, under certain circumstances, the settlement of currency hedging transactions or the requirement for collateral (if such activity is collateralised) in relation to one Share Class could have an adverse impact on the net asset value of the other Share Classes in issue. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Hedged share class implications for specific share class | The Investment Manager will undertake transactions specifically to reduce the exposure of holders of hedged Share Classes to movements in the material currencies within a fund’s portfolio (look through) or to movements in the reference currency, base or valuation currency of the Sub-fund (replication), as appropriate. The hedging strategy employed will not completely eliminate the exposure of the hedged Share Classes to currency movements and no assurance can be given that the hedging objective will be achieved. Investors should be aware that the hedging strategy may substantially limit Shareholders of the relevant hedged Share Class from benefiting if the hedged Share Class currency falls against the reference currency. Notwithstanding the hedging of the Share Classes described above, Shareholders in those Share Classes may still be exposed to an element of currency exchange rate risk. During periods when interest rates across currency areas are very similar, the Interest Rate Differential (“IRD”) is very small, the impact on hedged share class returns is low. However, in an environment where interest rates are significantly different between the Sub-fund’s exposure currency and the hedged share class currency, the IRD will be higher and the performance difference will be greater. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Share class hedging methodology – replication | The Investment Manager undertakes hedging transactions to reduce the effect of exchange rate fluctuations between the currency of the hedged share classes and the U.S. Dollar. | ✓ | ||||||||
Share class hedging methodology – replication | The Investment Manager undertakes hedging transactions to reduce the effect of exchange rate fluctuations between the currency of the hedged share classes and the Euro. | ✓ ✓ | ||||||||
Liabilities of the Fund | Shareholders are not liable for the debts of the Sub-fund. A Shareholder is not liable to make any further payment to the Sub-fund after he has paid in full for the purchase of Shares. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
42 Risk factors
M&G Corporate Bond Fund | M&G Dividend Fund | M&G Emerging Markets Bond Fund | M&G European Corporate Bond Fund | M&G European High Yield Bond Fund | M&G Fund of Investment Trust Shares | M&G Global Government Bond Fund | M&G Recovery Fund | M&G Smaller Companies Fund | |
Fund specific risks Risk warning | |||||||||
Whilst the Instrument of Incorporation provides for segregated liability between the Sub-funds, the concept of segregated liability may not be recognised and given effect by a court in certain contexts including where relevant contractual documents involving the Sub-funds are not construed in a manner to provide segregated liability. Where claims are brought by local creditors in foreign courts Protected cell - Foreign courts or under foreign contracts, and the liability relates to one Sub-fund which is unable to discharge its liability, it is not clear whether a foreign court would give effect to the segregated liability contained in the Instrument of Incorporation. Therefore, it is not possible to be certain that the assets of a Sub- fund will always be completely insulated from the liabilities of another Sub-fund of the Company in every circumstance. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ | |||
Shareholders using the Regular Redemption Facility should note that such redemptions are treated as disposals for the purposes of Capital Gains Tax. Shareholders should also note that where the Regular Redemption Facility annual percentage growth in value of their holding is less than the annual percentage value being redeemed using the Regular Redemption Facility, they will in effect be eroding the capital value of their original investment. | ✓ | ||||||||
Cash or money market instruments held in the Sub funds are subject to the prevailing interest rates Negative interest rates in the specific currency of the asset. There may be situations where the interest rate environment results in rates turning negative. In such situations the Sub-fund may have to pay to have money on deposit or hold the money market instrument. | ✓ ✓ | ✓ | ✓ | ✓ ✓ | ✓ ✓ | ✓ |
1.1 M&G Corporate Bond Fund
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in sterling-denominated corporate debt instruments. The Fund’s exposure to corporate debt may be gained through the use of derivatives. Derivatives may also be used for efficient portfolio management. Any currency exposures within the Fund may be managed by currency xxxxxx into sterling. The Fund may also invest in collective investment schemes, other transferable securities and other debt instruments (including corporate debt and government and public securities denominated in any currency), cash, near cash, other money market securities, warrants and other derivative instruments.
Investment Approach
The Fund’s strategy is based on the principle that corporate bond market returns are driven by a combination of macroeconomic, asset, sector and stock-level factors. As different factors dominate returns at different stages of the economic cycle, the manager applies a dynamic investment approach, changing the blend of duration and credit exposure in the portfolio to weight them appropriately.
The fund manager has the investment freedom to take a high-conviction approach when selecting credits for the portfolio. Diversification – across individual issuers as well as industries – is an essential element of the Fund’s strategy to limit the potential for losses in the event of default.
The Fund’s investment style combines top-down and bottom-up analysis, and the fund manager is assisted in the selection of individual credits by a large team of independent sovereign and public credit analysts.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Investment minima
Lump sum initial investment Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: £100 Class X: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Lump sum holding Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: £10 Class X: £10 Class R: £10 Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: £100
Class X: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation & Income Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income Sterling Class I – Accumulation and Income Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income Sterling Class Z – Accumulation and Income
Charges and Expenses
Initial charge Class A: nil
Class X: nil Class R: nil Class I: nil Class C: nil Class J: nil Class Z: nil
Redemption charge Class A: n/a Class X: n/a Class R: n/a Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.00% Class X: 1.00%
Class R: 0.75%
Class I: 0.5% Class C: nil
Class J: Up to 0.5% Class Z: nil
Administration Charge Class A: 0.15% Class X: 0.15%
Class R: 0.15%
Class I: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly sterling denominated corporate debt instruments over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642960
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.2 M&G Dividend Fund.
Investment objective and policy
The Fund invests mainly in a range of UK equities with the aim of achieving a steadily increasing income stream. The Fund will target a yield higher than that of the FTSE All-Share Index. Subject to this, the aim will be to maximise total return (the combination of income and growth of capital).
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and income Sterling Class I – Accumulation and Income Sterling Class C – Income
Redemption charge Class A: n/a Class X: n/a Class R: n/a Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.5% Class X: 1.5%
Class R: 1.0%
Class I: 0.75% Class C: nil
Class J: up to 0.75% Class Z: nil
Administration Charge Class A: 0.15% Class X: 0.15%
Class R: 0.15%
Class I: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Sterling Class J – Accumulation and Income
Sterling Class Z – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: £100 Class X: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Lump sum holding Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: £10 Class X: £10 Class R: £10 Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: £100
Class X: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares Income Shares Annual Management Charge 100% to Income 100% to Capital Administration Charge 100% to Income 100% to Capital
Share Class Hedging Charge N/A N/A
Depositary’s Charge 100% to Capital 100% to Capital
Annual Custody Charge 100% to Capital 100% to Capital Custody Transaction Charges 100% to Capital 100% to Capital Expenses 100% to Capital 100% to Capital Portfolio Transaction Charges 100% to Capital 100% to Capital
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a steadily growing income stream from a portfolio of mainly UK equities over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642959
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
Charges and Expenses
Initial charge Class A: nil
Class X: nil Class R: nil Class I: nil Class C: nil Class J: nil Class Z: nil
1.3 M&G Emerging Markets Bond Fund.
Investment Objective
The Fund aims to maximise total return (the combination of income and growth of capital).
Investment Policy
The Fund invests mainly in debt instruments issued by emerging market borrowers, including government, government agency and corporate debt. There are no restrictions on the currencies to which the Fund may be exposed. Derivatives may be used for investment purposes as well as for efficient portfolio management. The Fund may also invest in collective investment schemes, other transferable securities (including other debt instruments), cash and near cash, deposits, warrants and money market instruments. M&G has the discretion to identify the countries that it considers to qualify as emerging markets although these will typically be those that the IMF or World Bank define as emerging or developing economies.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income
Sterling Class A-H (hedged) – Accumulation and Income
Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income
Sterling Class R-H (hedged) – Accumulation and Income
Sterling Class I – Accumulation and Income
Sterling Class I-H (hedged) – Accumulation and Income
Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income
Sterling Class J-H (hedged) – Accumulation and Income
Sterling Class Z – Accumulation and Income
Sterling Class Z-H (hedged) – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class A-H: £500 Class X: £500 Class R: 500 Class R-H: £500 Class I: £500,000
Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: £100 Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: £500 Class A-H: £500 Class X: £500 Class R: £500 Class R-H: £500 Class I: £500,000 Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: £10 Class A-H: £10 Class X: £10 Class R: £10 Class R-H: £10 Class I: n/a Class I-H: n/a Class C: n/a
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Redemption Class A: £100
Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses
Initial charge Class A: nil
Class A-H: nil Class X: nil Class R: nil Class R-H: nil Class I: nil Class I-H: nil Class C: nil Class J: nil Class J-H: nil Class Z: nil Class Z-H: nil
Redemption charge Class A: n/a Class A-H: n/a Class X: n/a Class R: n/a Class R-H: n/a Class I: n/a Class I-H: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1.25% Class A-H: 1.25%
Class X: 1.25%
Class R: 1.00%
Class R-H: 1.00%
Class I: 0.60%
Class I-H: 0.60%
Class C: nil
Class J: up to 0.60% Class J-H: up to 0.60% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class X: 0.15%
Class R: 0.15%
Class R-H: 0.15%
Class I: 0.15%
Class I-H: 0.15%
Class C: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
ACD’s share class hedging fee Class A-H: 0.01% to 0.055% Class R-H: 0.01% to 0.055%
Class I-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | 100% to Income | 100% to Capital |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly debt instruments issued by emerging market borrowers over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: U.S. Dollar
Product Reference Number: 642958
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.4 M&G European Corporate Bond Fund
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in investment grade corporate bonds denominated in any European currency. The Fund may also invest in high yield corporate bonds, government and public securities denominated in any European currency. The Fund’s exposure to bonds, government and other public securities may be gained through the use of derivatives. Derivatives may also be used for efficient portfolio management. The Fund may also invest in collective investment schemes, other transferable securities, cash, near cash, other money market instruments, warrants and other derivative instruments which may be denominated in any major global currency. More than 70% of the Fund will be in euro or hedged back to euro.
Investment Approach
The fund manager believes that bond returns are driven by a combination of macroeconomic, asset, sector, geography and stock-level factors. A dynamic investment approach is followed, allowing the fund manager to change the blend of duration and credit exposure based on the outlook. A high level of diversification, across individual issuers, sectors and geographies is an essential part of the investment process.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income
Sterling Class A-H (hedged) – Accumulation and Income
Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income
Sterling Class R-H (hedged) – Accumulation and Income
Sterling Class I – Accumulation and Income
Sterling Class I-H (hedged) – Accumulation and Income
Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income
Sterling Class J-H (hedged) – Accumulation and Income
Sterling Class Z – Accumulation and Income
Sterling Class Z-H (hedged) – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class A-H: £500 Class X: £500 Class R: £500 Class R-H: £500 Class I: £500,000 Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: £100 Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: £500 Class A-H: £500 Class X: £500 Class R: £500 Class R-H: £500 Class I: £500,000 Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: £10 Class A-H: £10 Class X: £10 Class R: £10 Class R-H: £10 Class I: n/a Class I-H: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: £100
Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses
Initial charge Class A: nil
Class A-H: nil Class X: nil Class R: nil Class R-H: nil Class I: nil Class I-H: nil Class C: nil Class J: nil Class J-H: nil Class Z: nil Class Z-H: nil
Redemption charge Class A: n/a Class A-H: n/a Class X: n/a Class R: n/a Class R-H: n/a Class I: n/a Class I-H: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1% Class A-H: 1%
Class X: 1.00%
Class R: 0.75%
Class R-H: 0.75%
Class I: 0.5%
Class I-H: 0.5% Class C: nil
Class J: up to 0.5% Class J-H: up to 0.5% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class X: 0.15%
Class R: 0.15% Class R-H: 0.15 %
Class I: 0.15 % Class I-H: 0.15%
Class C: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
ACD’s share class hedging fee Class A-H: 0.01% to 0.055% Class R-H: 0.01% to 0.055%
Class I-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Allocation of Charges
Accumulation Shares Income Shares
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | 100% to Income | 100% to Capital |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly investment grade corporate bonds denominated in any European currency over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 13 January 2003
Valuation Currency: Euro
Product Reference Number: 642955
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.5 M&G European High Yield Bond Fund
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in higher yielding debt instruments denominated in any European currency and will normally be managed to give investors exposure to European currencies. The Fund’s exposure to higher yielding debt instruments may be gained through the use of
Investment minima
Lump sum initial investment Class A: £500 Class A-H: £500 Class X: £500 Class R: £500 Class R-H: £500 Class I: £500,000 Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application
Class Z: On application Class Z-H: On application
derivatives. Derivatives may also be used for efficient portfolio management.
The Fund may also invest in collective investment schemes, government and public securities and other transferable securities, cash, near cash, other money market instruments, warrants and other derivative instruments which may be denominated in any major global currency. Any non-European currency exposures within the Fund may be managed by currency xxxxxx in European currencies. More than 70% of the Fund will be in euro or hedged back to euro.
Investment Approach
The fund manager concentrates on bottom-up analysis of individual bond issues while remaining aware of macroeconomic developments. Emphasis is placed upon investigating the ability of a company or government to meet its interest payments, especially during unfavourable economic conditions. Credit risk is constantly monitored and typically spread across a variety of countries and industrial sectors.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income
Sterling Class A-H (hedged) – Accumulation and Income
Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income
Sterling Class R-H (hedged) – Accumulation and Income
Sterling Class I – Accumulation and Income
Sterling Class I-H (hedged) – Accumulation and Income
Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income
Sterling Class J-H (hedged) – Accumulation and Income
Sterling Class Z – Accumulation and Income
Sterling Class Z-H (hedged) – Accumulation and Income
Lump sum subsequent investment Class A: £100 Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: £500 Class A-H: £500 Class X: £500 Class R: £500 Class R-H: £500 Class I: £500,000 Class I-H: £500,000
Class C: £500,000 Class J: On application
Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: £10 Class A-H: £10 Class X: £10 Class R: £10 Class R-H: £10 Class I: n/a Class I-H: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: £100
Class A-H: £100 Class X: £100 Class R: £100 Class R-H: £100 Class I: £10,000 Class I-H: £10,000 Class C: £25,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses
Initial charge Class A: nil
Class A-H: nil Class X: nil Class R: nil Class R-H: nil Class I: nil Class I-H: nil Class C: nil Class J: nil Class J-H: nil Class Z: nil Class Z-H: nil
Redemption charge Class A: n/a Class A-H: n/a Class X: n/a Class R: n/a Class R-H: n/a Class I: n/a Class I-H: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1.25% Class A-H: 1.25%
Class X: 1.25%
Class R: 1.00%
Class R-H: 1.00%
Class I: 0.75%
Class I-H: 0.75%
Class C: nil
Class J: up to 0.75% Class J-H: up to 0.75% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class X: 0.15%
Class R: 0.15%
Class R-H: 0.15%
Class I: 0.15%
Class I-H: 0.15%
Class C: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
ACD’s share class hedging fee Class A-H: 0.01% to 0.055% Class R-H: 0.01% to 0.055%
Class I-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Allocation of Charges
Accumulation Shares Income Shares Annual Management Charge 100% to Income 100% to Capital Administration Charge 100% to Income 100% to Capital Share Class Hedging Charge 100% to Income 100% to Capital Depositary’s Charge 100% to Income 100% to Income
Annual Custody Charge 100% to Income 100% to Income Custody Transaction Charges 100% to Capital 100% to Capital Expenses 100% to Income 100% to Income Portfolio Transaction Charges 100% to Capital 100% to Capital
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital whilst generating a high level of income from a portfolio of mainly higher yielding debt instruments denominated in any European currency over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Euro
Product Reference Number: 642956
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.6 M&G Fund of Investment Trust Shares.
Investment objective
The Fund aims to provide a higher total return (the combination of capital growth and income), net of the Ongoing Charges Figure, than that of the FTSE All Share Equity Investment Instruments Index over any five year period.
Investment policy
At least 80% of the Fund is invested in the shares of investment trust companies. While these stocks are listed in the UK, such assets will be used to give exposure to a wide range of international markets. These investment trust companies may also hold a broad range of investment asset classes including equities, real estate and debt.
The fund may also invest in other transferable securities directly or via collective investment schemes, and may hold cash for liquidity purposes.
Charges and Expenses
Initial charge Class A: nil
Class X: nil Class C: nil Class Z: nil
Redemption charge Class A: n/a Class X: n/a Class C: n/a Class Z: n/a
Annual Management Charge Class A: 1.00% Class X: 1.00% Class C: nil Class Z:nil
Administration Charge Class A: 0.15% Class X: 0.15%
Class C: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Collective investment schemes may include funds managed by M&G.
Derivatives may be used for efficient portfolio management and hedging purposes.
Investment approach
The fund manager selects investment vehicles from which long-term growth (over five years or more) can be obtained by assessing their investment philosophy, style, objective and the ability of each manager to deliver on them; and the discount at which its shares are trading.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income Sterling Class X – Accumulation and Income Sterling Class C – Accumulation and Income Sterling Class Z – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class X: £500 Class C: £500,000
Class Z: On application
Lump sum subsequent investment Class A: £100 Class X: £100 Class C: £25,000
Class Z: On application
Lump sum holding Class A: £500 Class X: £500 Class C: £500,000
Class Z: On application
Regular saving (per month) Class A: £10 Class X: £10 Class C: n/a Class Z: n/a
Redemption Class A: £100
Class X: £100
Class C: £25,000
Class Z: On application
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors with basic investment knowledge, seeking growth and income through an actively managed fund invested in investment trust companies shares. Investors should be looking to invest for at least five years and should appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642965
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.7 M&G Global Government Bond Fund.
Investment Objective
The Fund aims to maximise total return (the combination of income and growth of capital).
Investment Policy
The portfolio will mainly consist of investment grade government debt securities, including government guaranteed debt securities, and will be invested on a global basis. The Fund’s exposure to investment grade government debt may be gained through the use of derivatives. The Fund may also invest in other government and public securities, collective investment schemes, other transferable securities, other debt instruments, cash and near cash, deposits, warrants, money market instruments and other derivative instruments. The Fund may use derivatives for Efficient Portfolio Management purposes.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income Sterling Class R – Accumulation and Income Sterling Class I – Accumulation and Income Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income Sterling Class Z – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Lump sum holding Class A: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: £10 Class R: £10 Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: £100
Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Charges and Expenses
Initial charge Class A: nil
Class R: nil Class I: nil Class C: nil Class J: nil Class Z: nil
Redemption charge Class A: n/a Class R: n/a Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1% Class R: 0.75%
Class I: 0.50% Class C: nil
Class J: up to 0.50% Class Z: nil
Administration Charge Class A: 0.15% Class R: 0.15%
Class I: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly investment grade government debt securities, including government guaranteed debt securities, over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: U.S. Dollar
Product Reference Number: 642964
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
The Fund was created as a result of the conversion of the M&G International Sovereign Bond Fund unit trust which had been launched on 4 October 1999. The last significant change to the Fund’s investment objective and/or investment policy occurred on 1 July 2014, when it was also renamed.
1.8 M&G Recovery Fund.
Investment objective and policy
The Fund predominantly invests in a diversified range of securities issued by companies which are out of favour, in difficulty or whose future prospects are not fully recognised by the market. The sole aim of the Fund is capital growth. There is no particular income yield target.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Performance Comparator: FTSE All Share Index
The Fund is actively managed. The index is a point of reference against which the performance of the Fund may be measured.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Net Accumulation and Net Income
Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income Sterling Class I – Accumulation and Income Sterling Class C – Accumulation and Income Sterling Class J – Accumulation and Income Sterling Class Z – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class X: £500 Class R: £500 Class C: £500,000 Class I: £500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: £100 Class X: £100 Class R: £100 Class C: £25,000 Class I: £10,000
Class J: On application Class Z: On application
Lump sum holding Class A: £500 Class X: £500 Class R: £500 Class C: £500,000 Class I: £500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: £10 Class X: £10 Class R: £10 Class C: n/a Class I: n/a Class J: n/a Class Z: n/a
Redemption Class A: £100
Class X: £100 Class R: £100 Class C: £25,000 Class I: £10,000
Class J: On application Class Z: On application
Charges and Expenses
Initial charge Class A: nil
Class X: nil Class R: nil Class C: nil Class I: nil Class J: nil Class Z: nil
Redemption charge Class A: n/a Class X: n/a Class R: n/a Class C: n/a Class I: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.5% Class X: 1.5%
Class R: 1.0% Class C: nil Class I: 0.75%
Class J: up to 0.75% Class Z: nil
Administration Charge Class A: 0.15% Class X: 0.15%
Class R: 0.15%
Class C: 0.15%
Class I: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares Income Shares
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain growth of capital from a portfolio of diversified securities issued by companies which are out of favour, in difficulty or whose future prospects are not fully recognised by the market, over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642963
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1.9 M&G Smaller Companies Fund.
Investment objective
The Fund aims to deliver a higher total return (the combination of capital growth and income) than the Numis Smaller Companies Index (excluding Investment Companies), net of the Ongoing Charge Figure, over any five year period.
Investment policy
At least 80% of the Fund is invested in UK smaller companies. These are UK listed companies which, at the initial time of purchase, are:
• in the bottom 10% (by market capitalisation) of the FTSE All- Share index, or
• in the Numis Smaller Companies Index (excluding Investment Companies), or
• listed on the Alternative Investment Market.
The Fund may also invest in collective investment schemes and other transferable securities. Cash and near cash may be held for ancillary purposes and derivatives, including warrants, may be used for efficient portfolio management and hedging purposes.
Investment approach
The fund manager takes a bottom-up approach to stockpicking and aims to construct a well-diversified portfolio. A long-term perspective is adopted with particular focus placed on ‘growth drivers’, competitive advantage, change, quality of management and valuation.
When a company held by the Fund grows such that it no longer has the characteristics of a smaller company, the fund manager will reduce the holding in a manner and timescale best suited to meeting the Fund’s objective.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Sterling Class A – Accumulation and Income Sterling Class X – Accumulation and Income Sterling Class R – Accumulation and Income Sterling Class I – Accumulation and Income Sterling Class C – Income
Sterling Class J – Accumulation and Income Sterling Class Z – Accumulation and Income
Investment minima
Lump sum initial investment Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: £100 Class X: £100 Class R: £100 Class I: £10,000 Class C £25,000
Class J: On application Class Z: On application
Lump sum holding Class A: £500 Class X: £500 Class R: £500 Class I: £500,000 Class C: £500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: £10 Class X: £10 Class R: £10 Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: £100
Class X: £100 Class R: £100 Class I: £10,000 Class C: £25,000
Class J: On application Class Z: On application
Charges and Expenses
Initial charge Class A: nil
Class X: nil Class R: nil Class I: nil Class C: nil Class J: nil Class Z: nil
Redemption charge Class A: n/a Class X: n/a Class R: n/a Class I: n/a Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.5% Class X: 1.5%
Class R: 1.0%
Class I: 0.75% Class C: nil
Class J: up to 0.75% Class Z: nil
Administration Charge Class A: 0.15% Class X: 0.15%
Class R: 0.15%
Class I: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain growth of capital from a portfolio of securities issued by smaller companies, over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642961
*Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
1 The ACD’s investment policy may mean that at times, where it is considered appropriate, the property of each Sub-fund will not be fully invested and that prudent levels of liquidity will be maintained.
1.1 Treatment of obligations
Where the COLL Sourcebook allows a transaction to be entered into or an investment to be retained only (for example, investment in warrants and nil and partly paid securities and the general power to accept or underwrite) if possible obligations arising out of the investment transactions or out of the retention would not cause any breach of any limits in COLL 5, it must be assumed that the maximum possible liability of the Company under any other of those rules has also to be provided for.
Where a rule in the COLL Sourcebook permits an investment transaction to be entered into or an investment to be retained only if that investment transaction, or the retention, or other similar transactions, are covered:
1.1.1 it must be assumed that in applying any of those rules, each Sub-fund must also simultaneously satisfy any other obligation relating to cover; and
1.1.2 no element of cover must be used more than once.
1.2 UCITS schemes: permitted types of scheme property
The scheme property of a Sub-fund must, except where otherwise provided by COLL 5, and subject to its investment objective and policy, consist solely of any or all of:
1.2.1 transferable securities;
1.2.2 approved money-market instruments;
1.2.3 units in collective investment schemes;
1.2.4 derivatives and forward transactions;
1.2.5 deposits; and
1.2.6 movable and immovable property that is necessary for the direct pursuit of the Company’s business; in accordance with the rules in COLL 5.2.
1.3 Transferable Securities
1.3.1 A transferable security is an investment falling within article
76 (Shares etc), article 77 (Instruments creating or acknowledging indebtedness), article 78 (Government and public securities), article 79 (Instruments giving entitlement to investments) and article 80 (Certificates representing certain securities) of the Regulated Activities Order.
1.3.2 An investment is not a transferable security if the title to it cannot be transferred, or can be transferred only with the consent of a third party.
1.3.3 In applying paragraph 1.3.2 to an investment which is issued by a body corporate, and which is an investment falling within articles 76 (Shares, etc) or 77 (Instruments creating or acknowledging indebtedness) of the Regulated Activities Order, the need for any consent on the part of the body corporate or any members or debenture holders of it may be ignored.
1.3.4 An investment is not a transferable security unless the liability of the holder of it to contribute to the debts of the issuer is limited to any amount for the time being unpaid by the holder of it in respect of the investment.
2 Investment in transferable securities
2.1 A Sub-fund may invest in a transferable security only to the extent that the transferable security fulfils the following criteria:
2.1.1 the potential loss which the Sub-fund may incur with respect to holding the transferable security is limited to the amount paid for it;
2.1.2 its liquidity does not compromise the ability of the ACD to comply with its obligation to redeem units at the request of any qualifying Shareholder (see COLL 6.2.16R(3));
2.1.3 reliable valuation is available for it as follows:
2.1.3.1 in the case of a transferable security admitted to or dealt in on an eligible market, where there are accurate, reliable and regular prices which are either market prices or prices made available by valuation systems independent from issuers;
2.1.3.2 in the case of a transferable security not admitted to or dealt in on an eligible market, where there is a valuation on a periodic basis which is derived from information from the issuer of the transferable security or from competent investment research;
2.1.4 appropriate information is available for it as follows:
2.1.4.1 in the case of a transferable security admitted to or dealt in on an eligible market, where there is regular, accurate and comprehensive information available to the market on the transferable security or, where relevant, on the portfolio of the transferable security;
2.1.4.2 in the case of a transferable security not admitted to or dealt in on an eligible market, where there is regular and accurate information available to the ACD on the transferable security or, where relevant, on the portfolio of the transferable security;
2.1.5 it is negotiable; and
2.1.6 its risks are adequately captured by the risk management process of the ACD.
2.2 Unless there is information available to the ACD that would lead to a different determination, a transferable security which is admitted to or dealt in on an eligible market shall be presumed:
2.2.1 not to compromise the ability of the ACD to comply with its obligation to redeem units at the request of any qualifying Shareholder; and
2.2.2 to be negotiable.
2.3 Not more than 5% in value of a Sub-fund is to consist of warrants.
3 Closed end funds constituting transferable securities
3.1 A unit in a closed end fund shall be taken to be a transferable security for the purposes of investment by a Sub-fund, provided it fulfils the criteria for transferable securities set out in section 2, and either:
3.1.1 where the closed end fund is constituted as an investment company or a unit trust:
3.1.1.1 it is subject to corporate governance mechanisms applied to companies; and
3.1.1.2 where another person carries out asset management activity on its behalf, that person is subject to national regulation for the purpose of investor protection; or
3.1.2 where the closed end fund is constituted under the law of contract:
3.1.2.1 it is subject to corporate governance mechanisms equivalent to those applied to companies; and
3.1.2.2 it is managed by a person who is subject to national regulation for the purpose of investor protection.
4 Transferable securities linked to other assets
4.1 A Sub-fund may invest in any other investment which shall be taken to be a transferable security for the purposes of investment by a Sub-fund provided the investment:
4.1.1 fulfils the criteria for transferable securities set out in section 2 above; and
4.1.2 is backed by or linked to the performance of other assets, which may differ from those in which a Sub-fund can invest.
4.2 Where an investment in 4.1 contains an embedded derivative component (see COLL 5.2.19R(3A)), the requirements of this section with respect to derivatives and forwards will apply to that component.
5 Approved Money Market Instruments
Only M&G Corporate Bond Fund, M&G Emerging Markets Bond Fund, M&G European Corporate Bond Fund, M&G European High Yield Bond Fund and M&G Global Government Bond Fund may invest in money-market instruments.
5.1 An approved money-market instrument is a money-market instrument which is normally dealt in on the money market, is liquid and has a value which can be accurately determined at any time.
5.2 A money-market instrument shall be regarded as normally dealt in on the money market if it:
5.2.1 has a maturity at issuance of up to and including 397 days;
5.2.2 has a residual maturity of up to and including 397 days;
5.2.3 undergoes regular yield adjustments in line with money market conditions at least every 397 days; or
5.2.4 has a risk profile, including credit and interest rate risks, corresponding to that of an instrument which has a maturity as set out in 5.2.1 or 5.2.2 or is subject to yield adjustments as set out in 5.2.3.
5.3 A money-market instrument shall be regarded as liquid if it can be sold at limited cost in an adequately short time frame, taking into account the obligation of the ACD to redeem units at the request of any qualifying Shareholder (see COLL 6.2.16R(3)).
5.4 A money-market instrument shall be regarded as having a value which can be accurately determined at any time if accurate and reliable valuations systems, which fulfil the following criteria, are available:
5.4.1 enabling the ACD to calculate a net asset value in accordance with the value at which the instrument held in the portfolio could be exchanged between knowledgeable willing parties in an arm’s length transaction; and
5.4.2 based either on market data or on valuation models including systems based on amortised costs.
5.5 A money-market instrument that is normally dealt in on the money market and is admitted to or dealt in on an eligible market shall be presumed to be liquid and have a value which can be accurately determined at any time unless there is information available to the ACD that would lead to a different determination.
6 Transferable securities and money market instruments generally to be admitted or dealt in on an Eligible Market
6.1 Transferable securities and approved money market instruments held within a Sub-fund must be:
6.1.1 admitted to or dealt on an eligible market (as described in paragraphs 7.3.1 or 7.4); or
6.1.2 dealt on an eligible market as described (in paragraph 7.3.2).
6.1.3 for an approved money market instrument not admitted to or dealt in on an eligible market, within 8.1; or
6.1.4 recently issued transferable securities provided that:
6.1.4.1 the terms of issue include an undertaking that application will be made to be admitted to an eligible market; and
6.1.4.2 such admission is secured within a year of issue.
6.2 However, a Sub-fund may invest no more than 10% of the scheme property in transferable securities and approved money-market instruments other than those referred to in 6.1.
7 Eligible markets regime: purpose
7.1 To protect investors the markets on which investments of a Sub- fund are dealt in or traded on should be of an adequate quality (“eligible”) at the time of acquisition of the investment and until it is sold.
7.2 Where a market ceases to be eligible, investments on that market cease to be approved securities. The 10% restriction on investing in non approved securities applies and exceeding this limit because a market ceases to be eligible will generally be regarded as an inadvertent breach.
7.3 A market is eligible for the purposes of the rules if it is:
7.3.1 a regulated market; or
7.3.2 a market in an EEA State which is regulated, operates regularly and is open to the public; or
7.3.3 any market within 7.4
7.4 A market not falling within paragraph 7.3 is eligible for the purposes of COLL 5 if:
7.4.1 the ACD, after consultation with and notification to the Depositary, decides that market is appropriate for investment of, or dealing in, the Scheme Property;
7.4.2 the market is included in a list in the Prospectus; and
7.4.3 the Depositary has taken reasonable care to determine that:
7.4.3.1 adequate custody arrangements can be provided for the investment dealt in on that market; and
7.4.3.2 all reasonable steps have been taken by the ACD in deciding whether that market is eligible.
7.5 In paragraph 7.4.1, a market must not be considered appropriate unless it is regulated, operates regularly, is recognised as a market or exchange or as a self regulatory organisation by an overseas regulator, is open to the public, is adequately liquid and has adequate arrangements for unimpeded transmission of income and capital to or for the order of investors.
7.6 The eligible markets in which a Sub-fund may invest are set out in Appendix 3.
8 Money-market instruments with a regulated issuer
8.1 In addition to instruments admitted to or dealt in on an eligible market, a Sub-fund may invest in an approved money-market instrument provided it fulfils the following requirements:
8.1.1 the issue or the issuer is regulated for the purpose of protecting investors and savings; and
8.1.2 the instrument is issued or guaranteed in accordance with section 9 below.
8.2 The issue or the issuer of a money-market instrument, other than one dealt in on an eligible market, shall be regarded as regulated for the purpose of protecting investors and savings if:
8.2.1 the instrument is an approved money-market instrument;
8.2.2 appropriate information is available for the instrument (including information which allows an appropriate assessment of the credit risks related to investment in it), in accordance with section 10 below; and
8.2.3 the instrument is freely transferable.
9 Issuers and guarantors of money-market instruments
9.1 A Sub-fund may invest in an approved money-market instrument if it is:
9.1.1 issued or guaranteed by any one of the following:
9.1.1.1 a central authority of an EEA State or, if the EEA State is a federal state, one of the members making up the federation;
9.1.1.2 a regional or local authority of an EEA State;
9.1.1.3 the European Central Bank or a central bank of an EEA State;
9.1.1.4 the European Union or the European Investment Bank;
9.1.1.5 a non-EEA State or, in the case of a federal state, one of the members making up the federation;
9.1.1.6 a public international body to which one or more EEA States belong; or
9.1.2 issued by a body, any securities of which are dealt in on an eligible market; or
9.1.3 issued or guaranteed by an establishment which is:
9.1.3.1 subject to prudential supervision in accordance with criteria defined by Community law; or
9.1.3.2 subject to and complies with prudential rules considered by the FCA to be at least as stringent as those laid down by Community law.
9.2 An establishment shall be considered to satisfy the requirement in
9.1.3.2 if it is subject to and complies with prudential rules, and fulfils one or more of the following criteria:
9.2.1 it is located in the European Economic Area;
9.2.2 it is located in an OECD country belonging to the Group of Ten;
9.2.3 it has at least investment grade rating;
9.2.4 on the basis of an in-depth analysis of the issuer, it can be demonstrated that the prudential rules applicable to that issuer are at least as stringent as those laid down by Community law.
10 Appropriate information for money-market instruments
10.1 In the case of an approved money-market instrument within 9.1.2 or issued by a body of the type referred to in 11 below; or which is issued by an authority within 9.1.1.2 or a public international body within 9.1.1.6 but is not guaranteed by a central authority within 9.1.1.1, the following information must be available:
10.1.1 information on both the issue or the issuance programme, and the legal and financial situation of the issuer prior to the issue of the instrument, verified by appropriately qualified third parties not subject to instructions from the issuer;
10.1.2 updates of that information on a regular basis and whenever a significant event occurs; and
10.1.3 available and reliable statistics on the issue or the issuance programme.
10.2 In the case of an approved money-market instrument issued or guaranteed by an establishment within 9.1.3, the following information must be available:
10.2.1 information on the issue or the issuance programme or on the legal and financial situation of the issuer prior to the issue of the instrument;
10.2.2 updates of that information on a regular basis and whenever a significant event occurs; and
10.2.3 available and reliable statistics on the issue or the issuance programme, or other data enabling an appropriate assessment of the credit risks related to investment in those instruments.
10.3 In the case of an approved money-market instrument: 10.3.1 within 9.1.1.1, 9.1.1.4 or 9.1.1.5; or
10.3.2 which is issued by an authority within 9.1.1.2 or a public international body within 9.1.1.6 and is guaranteed by a central authority within 9.1.1.1;
information must be available on the issue or the issuance programme, or on the legal and financial situation of the issuer prior to the issue of the instrument.
11 Spread: general
11.1 This section 11 on spread does not apply in respect of a transferable security or an approved money-market instrument to which COLL 5.2.12R (Spread: government and public securities) applies.
11.2 For the purposes of this requirement companies included in the same group for the purposes of consolidated accounts as defined in accordance with Directive 83/349/EEC or in the same group in accordance with international accounting standards are regarded as a single body.
11.3 Not more than 20% in value of the Scheme Property is to consist of deposits with a single body.
11.4 Not more than 5% in value of the Scheme Property is to consist of transferable securities or approved money-market instruments issued by any single body.
11.5 The limit of 5% in paragraph 11.4 is raised to 10% in respect of up to 40% in value of the Scheme Property. Covered bonds need not be taken into account for the purpose of applying the limit of 40%.. The limit of 5% in 11.4 is raised to 25% in value of the Scheme Property in respect of covered bonds, provided that when a Sub- fund invests more than 5% in covered bonds issued by a single body, the total value of covered bonds held must not exceed 80% in value of the Scheme Property.
11.6 In applying paragraphs 11.4 and 11.5 certificates representing certain securities are treated as equivalent to the underlying security.
11.7 The exposure to any one counterparty in an OTC derivative transaction must not exceed 5% in value of the Scheme Property. This limit is raised to 10% where the counterparty is an Approved Bank.
11.8 Not more than 20% in value of a Sub-fund is to consist of transferable securities and approved money market instruments issued by the same group (as referred to in paragraph 11.2).
11.9 Not more than 10% in value of a Sub-fund is to consist of the units of any one collective investment scheme.
11.10 In applying the limits in paragraphs 11.3, 11.4, 11.5, 11.6 and 11.7 and in relation to a single body, not more than 20% in value of the Scheme Property is to consist of any combination of two or more of the following:
11.10.1 transferable securities (including covered bonds) or approved money market instruments issued by that body; or
11.10.2 deposits made by that body; or
11.10.3 exposures from OTC derivatives transactions made with that body.
11.11 For the purpose of calculating the limits in 11.7 and 11.10, the exposure in respect of an OTC derivative may be reduced to the extent that collateral is held in respect of it if the collateral meets each of the conditions specified in 11.12.
11.12 The conditions referred to in 11.11 are that the collateral:
11.12.1 is marked-to-market on a daily basis and exceeds the value of the amount at risk;
11.12.2 is exposed only to negligible risks (e.g. government bonds of first credit rating or cash) and is liquid;
11.12.3 is held by a third party custodian not related to the provider or is legally secured from the consequences of a failure of a related party; and
11.12.4 can be fully enforced by a Sub-fund at any time.
11.13 For the purpose of calculating the limits in 11.7 and 11.10, OTC derivative positions with the same counterparty may be netted provided that the netting procedures:
11.13.1 comply with the conditions set out in Section 3 (Contractual netting (Contracts for novation and other netting agreements)) of Annex III to Directive 2000/12/EC; and
11.13.2 are based on legally binding agreements.
11.14 In applying this rule, all derivatives transactions are deemed to be free of counterparty risk if they are performed on an exchange where the clearing house meets each of the following conditions:
11.14.1 it is backed by an appropriate performance guarantee; and
11.14.2 it is characterised by a daily mark-to-market valuation of the derivative positions and an at least daily margining.
12 Spread: Government and public securities
12.1 This section applies in respect of a transferable security or an approved money-market instrument (“such securities”) that is issued by:
12.1.1 an EEA State;
12.1.2 a local authority of an EEA State;
12.1.3 a non-EEA State; or
12.1.4 a public international body to which one or more EEA States belong.
12.2 Where no more than 35% in value of the Scheme Property is invested in such securities issued by any one body, there is no limit on the amount which may be invested in such securities or in any one issue.
12.3 Subject to its investment objective and policy, a Sub-fund may invest more than 35% in value of the Scheme Property in such securities issued by any one body provided that:
12.3.1 the ACD has before any such investment is made consulted with the Depositary and as a result considers that the issuer of such securities is one which is appropriate in accordance with the investment objectives of a Sub- fund;
12.3.2 no more than 30% in value of the Scheme Property consists of such securities of any one issue;
12.3.3 the Scheme Property includes such securities issued by that or another issuer, of at least six different issues.
12.4 In relation to such securities:
12.4.1 issue, issued and issuer include guarantee, guaranteed and guarantor; and
12.4.2 an issue differs from another if there is a difference as to repayment date, rate of interest, guarantor or other material terms of the issue.
12.5 Notwithstanding paragraph 11.1 above, and subject to paragraphs
12.2 and 12.3, in applying the 20% limit in 11.3 with respect to a single body, such securities issued by that body shall be taken into account.
12.6 In relation to M&G Corporate Bond Fund, M&G Emerging Markets Bond Fund, M&G European High Yield Bond Fund, M&G Global Government Bond Fund over 35% of the Scheme Property may be invested in transferable securities or approved money-market instruments issued or guaranteed by a single state, local authority or public international body as listed hereafter:
12.6.1 the Government of the United Kingdom (including the Scottish Administration, the Executive Committee of the Northern Ireland Assembly and the National Assembly of Wales);
12.6.2 the Governments of Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Brazil, China, Malaysia, Mexico, South Africa, and Turkey;
12.6.3 the Government of Australia, Canada, Japan, New Zealand, Switzerland, USA;
12.6.4 the African Development Bank, Asian Development Bank, Eurofima, European Economic Community, European Bank for Reconstruction and Development, European Investment Bank, International Bank for Reconstruction and Development, International Financial Corporation.
13 Investment in collective investment schemes
13.1 A Sub-fund may invest in units in a collective investment scheme provided that the second scheme complies with the following requirements:
13.1.1 it is a scheme which complies with the conditions necessary for it to enjoy the rights conferred by the UCITS Directive; or
13.1.2 is recognised under the provisions of section 272 of the Act (Individually recognised overseas schemes) that is authorised by the supervisory authorities of Guernsey, Jersey or the Isle of Man (provided the requirements of article 50(1)(e) of the UCITS Directives are met); or
13.1.3 is authorised as a non-UCITS retail scheme (provided the requirements of article 50(1)(e) of the UCITS Directive are met); or
13.1.4 is authorised in another EEA State (provided the requirements of article 50(1)(e) of the UCITS Directive are met);
13.1.5 is authorised by the competent authority of an OECD member country (other than another EEA State) which has:
13.1.5.1 signed the IOSCO Multilateral Memorandum of Understanding; and
13.1.5.2 approved the scheme’s management company, rules and depositary/custody arrangements;
13.1.6 it is a scheme which complies where relevant with paragraph 13.4 below; and
13.1.7 it is a scheme which has terms which prohibit more than 10% in value of the Scheme Property consisting of units in collective investment schemes.
13.1.8 where it is an umbrella scheme, the provisions in paragraphs 13.1.6 and 13.1.7 apply to a Sub-fund as if it were a separate scheme.
13.2 Not more than 10% of the Scheme Property of a Sub-fund is to consist of units in collective investment schemes.
13.3 For the purposes of paragraphs 13.1 and 13.2 a Sub-fund of an umbrella scheme is to be treated as if it were a separate scheme. A Sub-fund may invest in or dispose of shares in another Sub-fund of the Company (the second Sub-fund) provided that the second Sub-fund does not hold shares in any other Sub-fund in the Company.
13.4 In accordance with COLL 5.2.15R a Sub-fund may invest up to 10% of its Scheme property units in collective investment schemes managed or operated by (or, if it is an open-ended investment company has as its authorised corporate director), the ACD or an Associate of the ACD.
13.5 A Sub-fund must not invest in or dispose of units in another collective investment scheme (the second scheme), which is managed or operated by (or in the case of an open-ended investment company has as its authorised corporate director), the ACD, or an Associate of the ACD, unless:
13.5.1 there is no charge in respect of the investment in or the disposal of units in the second scheme; or
13.5.2 the ACD is under a duty to pay to a Sub-fund by the close of business on the fourth business day next after the agreement to buy or to sell the amount referred to in paragraphs 13.5.3 and 13.5.4;
13.5.3 on investment, either:
any amount by which the consideration paid by a Sub-fund for the units in the second scheme exceeds the price that would have been paid for the benefit of the second scheme had the units been newly issued or sold by it; or
if such price cannot be ascertained by the ACD, the maximum amount of any charge permitted to be made by the seller of units in the second scheme;
13.5.4 on disposal, the amount of any charge made for the account of the ACD or operator of the second scheme or an Associate of any of them in respect of the disposal; and
13.6 In paragraphs 13.5.1 to 13.5.4 above:
13.6.1 any addition to or deduction from the consideration paid on the acquisition or disposal of units in the second scheme, which is applied for the benefit of the second scheme and is, or is like, a dilution xxxx made in accordance with the COLL Sourcebook, is to be treated as part of the price of the units and not as part of any charge; and
13.6.2 any switching charge made in respect of an exchange of units in one Sub-fund or separate part of the second scheme for units in another Sub-fund or separate part of that scheme is to be included as part of the consideration paid for the units.
14 Investment in nil and partly paid securities
14.1 A transferable security or an approved money market instrument on which any sum is unpaid falls within a power of investment only if it is reasonably foreseeable that the amount of any existing and potential call for any sum unpaid could be paid by the Company, at the time when payment is required, without contravening the rules in COLL 5.
15 Derivatives – General
15.1 All sub-funds may, in accordance with the COLL Sourcebook, use derivatives for the purposes of Efficient Portfolio Management (including hedging). In addition, the M&G Corporate Bond Fund, M&G Emerging Markets Bond Fund, M&G European Corporate Bond Fund, M&G European High Yield Bond Fund and M&G Global Government Bond Fund may use derivatives for investment purposes.
15.2 Under the COLL Sourcebook derivatives are permitted for Sub- funds for investment purposes and derivative transactions may be used for the purposes of hedging or meeting the investment objectives or both.
15.3 A transaction in derivatives or a forward transaction must not be effected for a Sub-fund unless the transaction is of a kind specified in section 16 below (Permitted transactions (derivatives and forwards)); and the transaction is covered, as required by section 28 (Cover for transactions in derivatives and forward transactions).
15.4 Where a Sub-fund invests in derivatives, the exposure to the underlying assets must not exceed the limits set out in COLL in relation to spread (COLL 5.2.13 R Spread: general and COLL
5.2.14 R Spread: government and public securities) except for index based derivatives where the rules below apply.
15.5 Where a transferable security or approved money market instrument embeds a derivative, this must be taken into account for the purposes of complying with this section.
15.6 A transferable security or an approved money-market instrument will embed a derivative if it contains a component which fulfils the following criteria:
15.6.1 by virtue of that component some or all of the cash flows that otherwise would be required by the transferable security or approved money-market instrument which functions as host contract can be modified according to a specified interest rate, financial instrument price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, and therefore vary in a way similar to a stand-alone derivative;
15.6.2 its economic characteristics and risks are not closely related to the economic characteristics and risks of the host contract; and
15.6.3 it has a significant impact on the risk profile and pricing of the transferable security or approved money-market instrument.
15.6.4 A transferable security or an approved money-market instrument does not embed a derivative where it contains a component which is contractually transferable independently of the transferable security or the approved money-market instrument. That component shall be deemed to be a separate instrument.
15.7 Where a scheme invests in an index based derivative, provided the relevant index falls within section 17 (Financial indices underlying derivatives) the underlying constituents of the index do not have to
be taken into account for the purposes of the rules on spread in COLL. The relaxation is subject to the ACD continuing to ensure that the Scheme Property provides a prudent spread of risk.
Please refer to section 42 above for a description of the risk factors associated with investments in derivatives.
16 Permitted transactions (derivatives and forwards)
16.1 A transaction in a derivative must be in an approved derivative; or be one which complies with section 20 (OTC transactions in derivatives).
16.2 A transaction in a derivative must have the underlying consisting of any or all of the following to which the scheme is dedicated:
16.2.1 transferable securities permitted under section 6 (Transferable securities and approved money market instruments generally to be admitted or dealt in on an Eligible Market);
16.2.2 approved money market instruments permitted under section 5 (approved money market instruments) above;
16.2.3 deposits permitted under section 23 (investment in deposits) below;
16.2.4 derivatives permitted under this rule;
16.2.5 collective investment scheme units permitted under section 13 (investment collective investment schemes) above;
16.2.6 financial indices which satisfy the criteria set out at section 17 (financial indices underlying derivatives) below;
16.2.7 interest rates;
16.2.8 foreign exchange rates; and
16.2.9 currencies.
16.3 A transaction in an approved derivative must be effected on or under the rules of an eligible derivatives market.
16.4 A transaction in a derivative must not cause a Sub-fund to diverge from its investment objectives as stated in the Instrument constituting the scheme and the most recently published version of this Prospectus.
16.5 A transaction in a derivative must not be entered into if the intended effect is to create the potential for an uncovered sale of one or more, transferable securities approved, money market instruments, units in collective investment schemes, or derivatives provided that a sale is not to be considered as uncovered if the conditions in section 19 (Requirement to cover sales) are satisfied.
16.6 Any forward transaction must be with an Eligible Institution or an Approved Bank.
16.7 A derivative includes an instrument which fulfils the following criteria:
16.7.1 it allows the transfer of the credit risk of the underlying independently from the other risks associated with that underlying;
16.7.2 it does not result in the delivery or the transfer of assets other than those referred to in paragraph 1.2 above (UCITS schemes: permitted types of scheme property) including cash;
16.7.3 in the case of an OTC derivative, it complies with the requirements in section 20 below (OTC transactions in derivatives);
16.7.4 its risks are adequately captured by the risk management process of the ACD, and by its internal control mechanisms in the case of risks of asymmetry of information between the ACD and the counterparty to the derivative, resulting from potential access of the
counterparty to non-public information on persons whose assets are used as the underlying by that derivative.
16.8 A Sub-fund may not undertake transactions in derivatives on commodities.
17 Financial indices underlying derivatives
17.1 The financial indices referred to in 16.2.6 are those which satisfy the following criteria:
17.1.1 the index is sufficiently diversified;
17.1.2 the index represents an adequate benchmark for the market to which it refers; and
17.1.3 the index is published in an appropriate manner.
17.2 A financial index is sufficiently diversified if:
17.2.1 it is composed in such a way that price movements or trading activities regarding one component do not unduly influence the performance of the whole index;
17.2.2 where it is composed of assets in which a Sub-fund is permitted to invest, its composition is at least diversified in accordance with the requirements with respect to spread and concentration set out in this section; and
17.2.3 where it is composed of assets in which a Sub-fund cannot invest, it is diversified in a way which is equivalent to the diversification achieved by the requirements with respect to spread and concentration set out in this section.
17.3 A financial index represents an adequate benchmark for the market to which it refers if:
17.3.1 it measures the performance of a representative group of underlyings in a relevant and appropriate way;
17.3.2 it is revised or rebalanced periodically to ensure that it continues to reflect the markets to which it refers, following criteria which are publicly available; and
17.3.3 the underlyings are sufficiently liquid, allowing users to replicate it if necessary.
17.4 A financial index is published in an appropriate manner if:
17.4.1 its publication process relies on sound procedures to collect prices, and calculate and subsequently publish the index value, including pricing procedures for components where a market price is not available; and
17.4.2 material information on matters such as index calculation, rebalancing methodologies, index changes or any operational difficulties in providing timely or accurate information is provided on a wide and timely basis.
17.5 Where the composition of underlyings of a transaction in a derivative does not satisfy the requirements for a financial index, the underlyings for that transaction shall where they satisfy the requirements with respect to other underlyings pursuant to 16.2, be regarded as a combination of those underlyings.
18 Transactions for the purchase of property
18.1 A derivative or forward transaction which will or could lead to the delivery of property for the account of a Sub-fund may be entered into only if that property can be held for the account of the Sub-fund, and the ACD having taken reasonable care determines that delivery of the property under the transaction will not occur or will not lead to a breach of the rules in the COLL Sourcebook.
19 Requirement to cover sales
19.1 No agreement by or on behalf of a Sub-fund to dispose of property or rights may be made unless the obligation to make the disposal and any other similar obligation could immediately be honoured by the Sub-fund by delivery of property or the assignment (or, in
Scotland, assignation) of rights, and the property and rights above are owned by the Sub-fund at the time of the agreement. This requirement does not apply to a deposit.
19.2 Paragraph 19.1 does not apply where:
19.2.1 the risks of the underlying financial instrument of a derivative can be appropriately represented by another financial instrument and the underlying financial instrument is highly liquid; or
19.2.2 the ACD or the Depositary has the right to settle the derivative in cash and cover exists within the Scheme Property which falls within one of the following asset Classes:
cash;
liquid debt instruments (e.g. government bonds of first credit rating) with appropriate safeguards (in particular, haircuts); or
other highly liquid assets having regard to their correlation with the underlying of the financial derivative instruments, subject to appropriate safeguards (e.g. haircuts where relevant).
19.3 In the asset classes referred to in 19.2.2, an asset may be considered as liquid where the instrument can be converted into cash in no more than seven business days at a price closely corresponding to the current valuation of the financial instrument on its own market.
20 OTC transactions in derivatives
20.1 Any transaction in an OTC derivative under paragraph 16.1 must be:
20.1.1 in a future, option or contract for differences;
20.1.2 with an approved counterparty; a counterparty to a transaction in derivatives is approved only if the counterparty is an Eligible Institution or an Approved Bank; or a person whose permission (including any requirements or limitations), as published in the FCA Register or whose Home State authorisation, permits it to enter into the transaction as principal off-exchange;
20.1.3 on approved terms; the terms of the transaction in derivatives are approved only if, before the transaction is entered into, the Depositary is satisfied that the counterparty has agreed with a Sub-fund: to provide at least daily and at any other time at the request of the Sub- fund reliable and verifiable valuation in respect of that transaction corresponding to its fair value (being the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction) and which does not rely only on market quotations by the counterparty and that it will, at the request of the Sub-fund, enter into a further transaction to sell, liquidate or close out that transaction at any time, at a fair value arrived at under the reliable market value basis or pricing model agreed under 20.1.4; and
20.1.4 capable of reliable valuation; a transaction in derivatives is capable of reliable valuation only if the ACD having taken reasonable care determines that, throughout the life of the derivative (if the transaction is entered into), it will be able to value the investment concerned with reasonable accuracy: on the basis of an up-to-date market value which the ACD and the Depositary have agreed is reliable; or if that value is not available, on the basis of a pricing model which the ACD and the Depositary have agreed uses an adequate recognised methodology; and
20.1.5 subject to verifiable valuation; a transaction in derivatives is subject to verifiable valuation only if, throughout the life of the derivative (if the transaction is entered into) verification of the valuation is carried out by:
20.1.5.1 an appropriate third party which is independent from the counterparty of the derivative, at an adequate frequency and in such a way that the ACD is able to check it; or
20.1.5.2 a department within the ACD which is independent from the department in charge of managing the scheme property and which is adequately equipped for such a purpose.
21 Valuation of OTC derivatives
21.1 For the purposes of paragraph 20.1.2, the ACD must:
21.1.1 establish, implement and maintain arrangements and procedures which ensure appropriate, transparent and fair valuation of the exposures of a Fund to OTC derivatives; and
21.1.2 ensure that the fair value of OTC derivatives is subject to adequate, accurate and independent assessment.
21.2 Where the arrangements and procedures referred to in paragraph
21.1.1 involve the performance of certain activities by third parties, the ACD must comply with the requirements in SYSC 8.1.13 R (Additional requirements for a management company) and COLL 6.6A.4 R (4) to (6) (Due diligence requirements of AFMs of UCITS schemes).
21.3 The arrangements and procedures referred to in this rule must be:
21.3.1 adequate and proportionate to the nature and complexity of the OTC derivative concerned; and
21.3.2 adequately documented.
22 Risk management
22.1 The ACD must use a risk management process, as reviewed by the Depositary, enabling it to monitor and measure as frequently as appropriate the risk of a Sub-fund’s positions and their contribution to the overall risk profile of the Sub-fund.
22.2 The following details of the risk management process must be regularly notified by the ACD to the FCA and at least on an annual basis:
22.2.1 a true and fair view of the types of derivatives and forward transactions to be used within a Company together with their underlying risks and any relevant quantitative limits; and
22.2.2 the methods for estimating risks in derivative and forward transactions.
23 Investment in deposits
Only M&G Corporate Bond Fund, M&G Emerging Markets Bond Fund, M&G European Corporate Bond Fund, M&G European High Yield Bond Fund and M&G Global Government Bond Fund may invest in deposits.
23.1 A Sub-fund may invest in deposits only with an Approved Bank and which are repayable on demand or have the right to be withdrawn, and maturing in no more than 12 months.
24 Significant influence
24.1 The Company must not acquire transferable securities issued by a body corporate and carrying rights to vote (whether or not on substantially all matters) at a general meeting of that body corporate if:
24.1.1 immediately before the acquisition, the aggregate of any such securities held by a Sub-fund gives the Sub-fund power significantly to influence the conduct of business of that body corporate; or
24.1.2 the acquisition gives the Company that power.
24.2 The Company is to be taken to have power significantly to influence the conduct of business of a body corporate if it can, because of the transferable securities held by it, exercise or control the exercise of 20% or more of the voting rights in that body corporate (disregarding for this purpose any temporary suspension of voting rights in respect of the transferable securities of that body corporate).
25 Concentration
The Company:
25.1 must not acquire transferable securities (other than debt securities) which:
25.1.1 do not carry a right to vote on any matter at a general meeting of the body corporate that issued them; and
25.1.2 represent more than 10% of those securities issued by that body corporate;
25.2 must not acquire more than 10% of the debt securities issued by any single body;
25.3 must not acquire more than 25% of the units in a collective investment scheme;
25.4 must not acquire more than 10% of the approved money market instruments issued by any single body; and
25.5 need not comply with the limits in paragraphs 25.2 to 25.4 if, at the time of acquisition, the net amount in issue of the relevant investment cannot be calculated.
26 Schemes replicating an index
26.1 Notwithstanding section 11 a Sub-fund may invest up to 20% in value of the Scheme Property in shares and debentures which are issued by the same body where the stated investment policy is to replicate the composition of a relevant index as defined below.
26.2 Replication of the composition of a relevant index shall be understood to be a reference to replication of the composition of the underlying assets of that index, including the use of techniques and instruments permitted for the purpose of efficient portfolio management.
26.3 The 20% limit can be raised up to 35% in value of the Scheme Property, but only in respect of one body and where justified by exceptional market conditions.
26.4 The indices referred to above are those which satisfy the following criteria:
26.4.1 The composition is sufficiently diversified;
26.4.2 The index represents an adequate benchmark for the market to which it refers; and
26.4.3 The index is published in an appropriate manner.
26.5 The composition of an index is sufficiently diversified if its components adhere to the spread and concentration requirements in this section.
26.6 An index represents an adequate benchmark if its provider uses a recognised methodology which generally does not result in the exclusion of a major issuer of the market to which it refers.
26.7 An index is published in an appropriate manner if:
26.7.1 it is accessible to the public;
26.7.2 the index provider is independent from the index- replicating Sub-fund; this does not preclude index providers and the Sub-fund from forming part of the same group, provided that effective arrangements for the management of conflicts of interest are in place.
27 Derivatives exposure
27.1 A Sub-fund may invest in derivatives and forward transactions as long as the exposure to which the Sub-fund is committed by that transaction itself is suitably covered from within its Scheme Property. Exposure will include any initial outlay in respect of that transaction.
27.2 Cover ensures that a Sub-fund is not exposed to the risk of loss of property, including money, to an extent greater than the net value of the Scheme Property. Therefore, the Sub-fund must hold Scheme Property sufficient in value or amount to match the exposure arising from a derivative obligation to which the Sub-fund is committed. Section 28 (Cover for transactions in derivatives and forward transactions) sets out detailed requirements for cover of a sub-fund.
27.3 Cover used in respect of one transaction in derivatives or forward transaction must not be used for cover in respect of another transaction in derivatives or a forward transaction.
28 Cover for transactions in derivatives and forward transactions
28.1 A transaction in derivatives or forward transaction is to be entered into only if the maximum exposure, in terms of the principal or notional principal created by the transaction to which the scheme is or may be committed by another person is covered globally.
28.2 Exposure is covered globally if adequate cover from within the Scheme Property is available to meet the scheme’s total exposure, taking into account the value of the underlying assets, any reasonably foreseeable market movement, counterparty risk, and the time available to liquidate any positions.
28.3 Cash not yet received into the Scheme Property but due to be received within one month is available as cover.
28.4 Property the subject of a stock lending transaction is only available for cover if the ACD has taken reasonable care to determine that it is obtainable (by return or re-acquisition) in time to meet the obligation for which cover is required.
28.5 The total exposure relating to derivatives held in a Sub-fund may not exceed the net value of the Scheme Property.
29 Daily calculation of global exposure
29.1 The ACD must calculate the global exposure of the Company on at least a daily basis.
29.2 For the purposes of this section, exposure must be calculated taking into account the current value of the underlying assets, the counterparty risk, future market movements and the time available to liquidate the positions.
30 Calculation of global exposure
30.1 The ACD must calculate the global exposure of the Company it manages either as:
30.1.1 the incremental exposure and leverage generated through the use of derivatives and forward transactions (including embedded derivatives as referred to in section 15 (Derivatives: general), which may not exceed 100% of the Net Asset Value of the scheme property of the Company, by way of the commitment approach; or
30.1.2 the market risk of the scheme property of the Company, by way of the value at risk approach.
30.2 The ACD must ensure that the method selected above is appropriate, taking into account:
30.2.1 the investment strategy pursued by the Company;
30.2.2 the types and complexities of the derivatives and forward transactions used; and
30.2.3 the proportion of the scheme property comprising derivatives and forward transactions.
30.3 Where a Company employs techniques and instruments including repo contracts or stock lending transactions in accordance with section 33 (Stock lending) in order to generate additional leverage or exposure to market risk, the ACD must take those transactions into consideration when calculating global exposure.
30.4 For the purposes of paragraph 30.1, value at risk means a measure of the maximum expected loss at a given confidence level over the specific time period.
30.5 The ACD calculates the global exposure of M&G Global Government Bond Fund using the value at risk (VaR) based techniques. VaR measure each fund’s sensitivity to core market risk factors such as credit risk and interest rates. VaR is a technique used to estimate the probability of portfolio losses based on statistical analysis of historical price trends and volatilities.
31 Commitment approach
31.1 Where the ACD uses the commitment approach for the calculation of global exposure, it must:
31.1.1 ensure that it applies this approach to all derivative and forward transactions (including embedded derivatives as referred to in section 15 (Derivatives: general)), whether used as part of the Company’s general investment policy, for the purposes of risk reduction or for the purposes of Efficient Portfolio Management in accordance with section 29 (Stock lending); and
31.1.2 convert each derivative or forward transaction into the market value of an equivalent position in the underlying asset of that derivative or forward (standard commitment approach).
31.2 The ACD may apply other calculation methods which are equivalent to the standard commitment approach.
31.3 For the commitment approach, the ACD may take account of netting and hedging arrangements when calculating global exposure of the Company, where these arrangements do not disregard obvious and material risks and result in a clear reduction in risk exposure.
31.4 Where the use of derivatives or forward transactions does not generate incremental exposure for the Company, the underlying exposure need not be included in the commitment calculation.
31.5 Where the commitment approach is used, temporary borrowing arrangements entered into on behalf of the Company in accordance with section 34 need not form part of the global exposure calculation.
32 Cover and borrowing
32.1 Cash obtained from borrowing, and borrowing which the ACD reasonably regards an Eligible Institution or an Approved Bank to be committed to provide, is available for cover under the previous section 28 (Cover for transactions in derivatives and forward transactions) as long as the normal limits on borrowing (see below) are observed.
32.2 Where, for the purposes of this paragraph a Sub-fund borrows an amount of currency from an Eligible Institution or an Approved Bank; and keeps an amount in another currency, at least equal to such borrowing for the time on deposit with the lender (or his agent or nominee), then this applies as if the borrowed currency, and not the deposited currency, were part of the Scheme Property, and the normal limits on borrowing under section 34 (General power to borrow) do not apply to that borrowing.
33 Cash and near cash
33.1 Cash and near cash must not be retained in the Scheme Property except to the extent that, this may reasonably be regarded as necessary in order to enable:
33.1.1 the pursuit of a Sub-fund’s investment objectives (applicable to M&G Corporate Bond Fund, M&G Emerging Markets Bond Fund, M&G European Corporate Bond Fund, M&G European High Yield Bond Fund and M&G Global Government Bond Fund only);or
33.1.2 redemption of Shares; or
33.1.3 efficient management of a Sub-fund in accordance with its investment objectives; or
33.1.4 other purposes which may reasonably be regarded as ancillary to the investment objectives of a Sub-fund.
33.2 During the period of the initial offer the Scheme Property may consist of cash and near cash without limitation.
34 General power to borrow
34.1 A Sub-fund may, in accordance with this paragraph and section 35, borrow money for the use of the Sub-fund on terms that the borrowing is to be repayable out of the Scheme Property. This power to borrow is subject to the obligation of the Sub-fund to comply with any restriction in the instrument constituting the Sub- fund.
34.2 A Sub-fund may borrow under paragraph 34.1 only from an Eligible Institution or an Approved Bank.
34.3 The ACD must ensure that any borrowing is on a temporary basis and that borrowings are not persistent, and for this purpose the ACD must have regard in particular to:
34.3.1 the duration of any period of borrowing; and
34.3.2 the number of occasions on which resort is had to borrowing in any period.
34.4 The ACD must ensure that no period of borrowing exceeds three months, without the consent of the Depositary.
34.5 These borrowing restrictions do not apply to “back to back” borrowing for currency hedging purposes.
34.6 A Sub-fund must not issue any debenture unless it acknowledges or creates a borrowing that complies with paragraph 34.1 to 34.5.
35 Borrowing limits
35.1 The ACD must ensure that a Sub-fund’s borrowing does not, on any business day, exceed 10% of the value of the Scheme Property of the Sub-fund.
35.2 In this section 35, “borrowing” includes, as well as borrowing in a conventional manner, any other arrangement (including a combination of derivatives) designed to achieve a temporary injection of money into the Scheme Property in the expectation that the sum will be repaid.
35.3 For each Sub-fund, borrowing does not include any arrangement for the Sub-fund to pay to a third party (including the ACD) any set up costs which the Sub-fund is entitled to amortise and which were paid on behalf of the Sub-fund by the third party.
36 Restrictions on lending of money
36.1 None of the money in the Scheme Property of a Sub-fund may be lent and, for the purposes of this prohibition, money is lent by a Sub- fund if it is paid to a person (“the payee”) on the basis that it should be repaid, whether or not by the payee.
36.2 Acquiring a debenture is not lending for the purposes of paragraph 36.1; nor is the placing of money on deposit or in a current account.
36.3 Paragraph 36.1 does not prevent a Sub-fund from providing an officer of the Sub-fund with funds to meet expenditure to be incurred by him for the purposes of the Sub-fund (or for the purposes of enabling him properly to perform his duties as an officer of the Sub- fund) or from doing anything to enable an officer to avoid incurring such expenditure.
37 Restrictions on lending of property other than money
37.1 The Scheme Property of a Sub-fund other than money must not be lent by way of deposit or otherwise.
37.2 The Scheme Property of a Sub-fund must not be mortgaged.
38 General power to accept or underwrite issues of stock
38.1 Any power in Chapter 5 of the COLL Sourcebook to invest in transferable securities may be used for the purpose of entering into transactions to which this section applies, subject to compliance with any restriction in the Instrument of Incorporation.
38.2 This section applies, subject to paragraph 38.3, to any agreement or understanding:
38.2.1 which is an underwriting or Sub-underwriting agreement; or
38.2.2 which contemplates that securities will or may be issued or subscribed for or acquired for the account of a Sub-fund.
38.3 Paragraph 38.2 does not apply to:
38.3.1 an option; or
38.3.2 a purchase of a transferable security which confers a right: to subscribe for or acquire a transferable security; or
to convert one transferable security into another.
38.3.3 The exposure of a Sub-fund to agreements and understandings within paragraph 38.2 must, on any business day:
be covered in accordance with the requirements of rule 5.3.3R of the COLL Sourcebook; and
be such that, if all possible obligations arising under them had immediately to be met in full, there would be no breach of any limit in Chapter 5 of the COLL Sourcebook.
39 Guarantees and indemnities
39.1 A Sub-fund or the Depositary for the account of the Sub-fund must not provide any guarantee or indemnity in respect of the obligation of any person.
39.2 None of the Scheme Property of a Sub-fund may be used to discharge any obligation arising under a guarantee or indemnity with respect to the obligation of any person.
39.3 Paragraphs 39.1 and 39.2 do not apply in respect of a Sub-fund to:
39.3.1 any indemnity or guarantee given for margin requirements where the derivatives or forward transactions are being used in accordance with the FCA rules;
39.3.2 an indemnity falling within the provisions of regulation 62(3) (Exemptions from liability to be void) of the Treasury Regulations;
39.3.3 an indemnity (other than any provision in it which is void under regulation 62 of the Treasury Regulations) given to the Depositary against any liability incurred by it as a consequence of the safekeeping of any of the Scheme Property by it or by anyone retained by it to assist it to perform its function of the safekeeping of the Scheme Property; and
39.3.4 an indemnity given to a person winding up a scheme if the indemnity is given for the purposes of arrangements by which the whole or part of the property of that scheme becomes the first property of a Sub-fund and the holders of units in that scheme become the first Shareholders in the Sub-fund.
40 Efficient Portfolio Management
40.1 The Company may enter into transactions for the purposes of efficient portfolio management (‘EPM’), including hedging transactions and temporary short term tactical asset allocation, e.g. for the purposes of preserving the value of an asset or assets of the Company and liquidity management purposes,(i.e. to enable the Company to be adequately invested).
Such transactions may include, but are not limited to currency forwards, futures, credit default swaps, total return swaps, dividend swaps, asset swaps, options and contracts for differences.
A number of risks arise in relation to derivatives transactions:
40.2 Permitted EPM transactions (excluding stock lending arrangements) are transactions in derivatives (i.e. options, futures or contracts for differences) dealt in or traded on an approved derivatives market; off exchange futures, options or contracts for differences resembling options; or synthetic futures in certain circumstances. The Company may enter into approved derivatives transactions on derivatives markets which are eligible. Eligible derivatives markets are those which the ACD after consultation with the Depositary has decided are appropriate for the purpose of investment of or dealing in the scheme property with regard to the relevant criteria set out in the Regulations and the Guidance on eligible markets issued by the FCA as amended from time to time.
40.3 The eligible derivatives markets for the Company are set out in Appendix 3.
40.4 New eligible derivatives markets may be added to a Sub-fund in accordance with the Regulations and only after the ACD has revised the prospectus accordingly.
40.5 Any forward transactions must be with an approved counterparty (eligible institutions, money market institutions etc). A derivatives or forward transaction which would or could lead to delivery of scheme property to the Depositary in respect of the Company may be entered into only if such scheme property can be held by the Company, and the ACD reasonably believes that delivery of the property pursuant to the transactions will not lead to a breach of the Regulations.
40.6 There is no limit on the amount of the scheme property which may be used for EPM but the transactions must satisfy three broadly- based requirements:
40.6.1 A transaction must reasonably be believed by the ACD to be economically appropriate to the efficient portfolio management of the Company. This means that transactions undertaken to reduce risk or cost (or both) must alone or in combination with other EPM transactions diminish a risk or cost of a kind or level which it is sensible to reduce and transactions undertaken to generate additional capital or income must confer a benefit on the Company or the Sub-fund.
40.6.2 EPM may not include speculative transactions.
40.6.3 The purpose of an EPM transaction for the Company must be to achieve one of the following aims in respect of the Company or a Sub-fund:
• reduction of risk
• reduction of cost
• the generation of additional capital or income
40.6.3.1 Reduction of risk allows for the use of the technique of cross-currency hedging in
order to switch all or part of the Company’s or Sub-fund’s exposure away from a currency the ACD considers unduly prone to risk, to another currency. This aim also permits the use of stock index contracts to change the exposure from one market to another, a technique known as ‘tactical asset allocation’.
40.6.3.2 Reduction of cost allows for the use of futures or options contracts, either on specific stocks or on an index, in order to minimise or eliminate the effect of changing prices of stocks to be bought or sold.
40.6.3.3 The aims of reduction of risk or cost, together or separately, allow the ACD on a temporary basis to use the technique of tactical asset allocation. Tactical asset allocation permits the ACD to undertake a switch in exposure by use of derivatives, rather than through sale and purchase of the scheme property. If an EPM transaction for the Company relates to the acquisition or potential acquisition of transferable securities, the ACD must intend that the Company should invest in transferable securities within a reasonable time and the ACD shall thereafter ensure that, unless the position has itself been closed out, that intention is realised within that reasonable time.
40.6.3.4 The generation of additional capital or income for the Company or Sub-fund with no or an acceptably low level of risk means the ACD reasonably believes that the Company or Sub-fund is certain (or certain barring events which are not reasonably foreseeable) to derive a benefit.
The generation of additional capital or income may arise out of taking advantage of price imperfections or from the receipt of a premium for writing of covered call or covered put options (even if the benefit is obtained at the expense of the foregoing of yet greater benefit) or pursuant to stocklending as permitted by the Regulations. The relevant purpose must relate to scheme property; scheme property (whether precisely identified or not) which is to be or is proposed to be acquired for the Company; and anticipated cash receipts of the Company, if due to be received at some time and likely to be received within one month.
40.7 Each EPM transaction must be fully covered ‘individually’ by scheme property of the right kind (i.e. in the case of exposure in terms of property, appropriate transferable securities or other property; and, in the case of exposure in terms of money, cash, near-cash instruments, borrowed cash or transferable securities which can be sold to realise the appropriate cash). It must also be covered ‘globally’ (i.e. after providing cover for existing EPM transactions there is adequate cover for another EPM transaction within the scheme property - there can be no gearing). Scheme property and cash can be used only once for cover and, generally, scheme property is not available for cover if it is the subject of a stocklending transaction. The EPM lending transaction in a back to back currency borrowing (i.e. borrowing permitted in order to reduce or eliminate risk arising by reason of fluctuations in exchange rates) does not require cover.
Appendix 3 –
Eligible Markets
Where permitted by their objective and policy, a Sub-fund may deal in any securities, derivatives or money market instruments on any market that is:
a) a regulated market; or
b) a market in an EEA State which is regulated, operates regularly and is open to the public; or
c) a market which the ACD, after consultation with the Depositary, decides is appropriate for investment of or dealing in the scheme property (see Appendix 2, 7.4 for more detail).
For the purposes of “b” above, the Manager may trade in bonds and other securities issued by non-UK institutions, on the UK OTC Market. Additionally, for “c” above, the markets listed below have been deemed appropriate.
In addition, up to 10% in value of a Sub-fund may be invested in transferable securities and/or derivatives which are not listed on these markets.
In the event that an eligible market changes its name or merges with another eligible market, the successor market will be an eligible market unless the FCA’s COLL rules require further due diligence by the ACD and Depositary in order for it to be approved. In these circumstances, the prospectus will be updated with the name of the new market at the next available opportunity.
Europe (Non-EEA States)
Croatia Zagreb Exchange
Switzerland SIX Swiss Exchange
Turkey Borsa Istanbul
Americas
Brazil BM&F Bovespa
Canada TSX (forms part of the TMX Group)
Mexico Bolsa Mexicana de Valores (Mexican Stock Exchange)
United States New York Stock Exchange NYSE Mkt LLC
Boston Stock Exchange (BSE) Chicago Stock Exchange (CHX) The NASDAQ Stock Market
US OTC market regulated by FINRA National Stock Exchange
NYSE Arca
NASDAQ OMX PHLX
The market in transferable securities issued by or on behalf of the Government of the United States of America conducted through those persons for the time being recognised and supervised by the Federal Reserve Bank of New York and known as primary dealers.
New Zealand New Zealand Stock Exchange
Philippines Philippine Stock Exchange (PSE)
Singapore Singapore Exchange (SGX)
Sri Lanka Colombo Stock Exchange
Taiwan Taiwan Stock Exchange
Gre Tai (Taiwan OTC)
Thailand The Stock Exchange of Thailand (SET)
Middle East
Israel Tel Aviv Stock Exchange (TASE)
For the purposes of “c” above, the derivatives markets listed below have been deemed appropriate.
Europe (Non-EEA States)
Switzerland EUREX
Americas
Canada The Montreal Exchange
United States CME Group
Chicago Board Options Exchange (CBOE)
Africa
South Africa The JSE Securities Exchange
Far East
Australia Australian Securities Exchange (ASX)
Hong Kong Hong Kong Exchanges
Japan Osaka Securities Exchange
Korea Korea Exchange Incorporated (KRX)
New Zealand New Zealand Futures Exchange
Singapore Singapore Exchange (SGX)
Thailand Thailand Futures Exchange (TFEX)
Africa
South Africa The JSE Securities Exchange
Far East
Australia Australian Securities Exchange (ASX)
China Shanghai Stock Exchange
Shenzhen Stock Exchange
Hong Kong Hong Kong Exchanges
Growth Global Enterprise Market (GEM)
India Bombay Stock Exchange Ltd
The National Stock Exchange of India
Indonesia Indonesia Stock Exchange (IDX)
Japan Tokyo Stock Exchange
Nagoya Stock Exchange Sapporo Stock Exchange JASDAQ
Korea Korea Exchange Incorporated (KRX)
Malaysia Bursa Malaysia Berhad
4.1 M&G Corporate Bond Fund
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in sterling-denominated corporate debt instruments. The Fund’s exposure to corporate debt may be gained through the use of derivatives. Derivatives may also be used for efficient portfolio management. Any currency exposures within the Fund may be managed by currency xxxxxx into sterling. The Fund may also invest in collective investment schemes, other transferable securities and other debt instruments (including corporate debt and government and public securities denominated in any currency), cash, near cash, other money market securities, warrants and other derivative instruments.
Investment Approach
The Fund’s strategy is based on the principle that corporate bond market returns are driven by a combination of macroeconomic, asset, sector and stock-level factors. As different factors dominate returns at different stages of the economic cycle, the manager applies a dynamic investment approach, changing the blend of duration and credit exposure in the portfolio to weight them appropriately.
The fund manager has the investment freedom to take a high-conviction approach when selecting credits for the portfolio. Diversification – across individual issuers as well as industries – is an essential element of the Fund’s strategy to limit the potential for losses in the event of default.
The Fund’s investment style combines top-down and bottom-up analysis, and the fund manager is assisted in the selection of individual credits by a large team of independent sovereign and public credit analysts.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Share classes/types in issue or available
for issue*: Euro Class A – Gross Accumulation and Gross Income
Euro Class B – Gross Accumulation
Euro Class C – Gross Accumulation and Gross Income
Euro Class J– Gross Accumulation and Gross Income
Euro Class Z– Gross Accumulation and Gross Income
U.S. Dollar Class A – Gross Accumulation and Gross Income
Investment minima (Euro Share Classes)
Lump sum initial investment Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: €75 Class B: €250 Class C: €50,000
Class J: On application Class Z: On application
Lump sum holding Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: €75 Class B: €75 Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: €75
Class B: €150 Class C: €50,000
Class J: On application Class Z: On application
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: $75 Class C: $50,000
Class J: On application Class Z: On application
Lump sum holding Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: $75
Class C: $50,000 Class J: On application Class Z: On application
U.S. Dollar Class C – Gross Accumulation and
Gross Income
U.S. Dollar Class J – Gross Accumulation and Gross Income
U.S. Dollar Class Z – Net Accumulation and Net Income
Swiss Franc Class A – Gross Accumulation Swiss Franc Class C – Gross Accumulation
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class C: CHF500,000
Class J: On application
Class Z: On application
Swiss Franc Class J – Gross Accumulation
Swiss Franc Class Z – Gross Accumulation
Singapore Dollar Class A- Gross Accumulation and Net Income
Singapore Dollar Class C– Gross Accumulation and Net Income
Singapore Dollar Class J – Gross Accumulation and Net Income
Singapore Dollar Class Z – Gross Accumulation and Net Income
Lump sum subsequent investment Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Lump sum holding Class A: CHF1,000 Class C: CHF500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class C: $500,000 Class J: On application Class Z: On application
Lump sum subsequent investment Class A: S$75 Class C: S$50,000
Class J: On application Class Z: On application
Lump sum holding Class A: S$1,000 Class C: S$500,000 Class J: On application Class Z: On application
Redemption Class A: S$75
Class C: S$50,000 Class J: On application Class Z: On application
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly sterling denominated corporate debt instruments over the long term. but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642960
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 3.25%
Class B: nil Class C: 1.25%
Class J: 1.25%
Class Z: 1.25%
Redemption charge Class A: n/a Class B: 1% Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.25% Class B: 1.50%
Class C: 0.50% Class J: up to 0.50% Class Z: nil
Administration Charge Class A: 0.15% Class B: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
4.2 M&G Emerging Markets Bond Fund.
Investment Objective
The Fund aims to maximise total return (the combination of income and growth of capital).
Investment Policy
The Fund invests mainly in debt instruments issued by emerging market borrowers, including government, government agency and corporate debt. There are no restrictions on the currencies to which the Fund may be exposed. Derivatives may be used for investment purposes as well as for efficient portfolio management. The Fund may also invest in collective investment schemes, other transferable securities (including other debt instruments), cash and near cash, deposits, warrants and money market instruments. M&G has the discretion to identify the countries that it considers to qualify as emerging markets although these will typically be those that the IMF or World Bank define as emerging or developing economies.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Euro Class A – Gross Accumulation and Gross Income
Euro Class A-H (hedged) – Gross Accumulation and Gross Income
Euro Class B – Gross Accumulation and Gross Income
Euro Class B-H (hedged) – Gross Accumulation and Gross Income
Euro Class C – Gross Accumulation and Gross Income
Euro C-H (hedged) – Gross Accumulation and Gross Income
Euro Class J– Gross Accumulation and Gross Income
Euro Class J-H (hedged) – Gross Accumulation and Gross Income
Euro Class Z– Gross Accumulation and Gross Income
Euro Class Z-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class A – Gross Accumulation and Gross Income
U.S. Dollar Class A-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class C – Gross Accumulation and Gross Income
U.S. Dollar Class C-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class J – Gross Accumulation and Gross Income
U.S. Dollar J-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class Z – Gross Accumulation and Gross Income
U.S. Dollar Class Z-H (hedged) – Gross Accumulation and Gross Income
Swiss Franc Class A – Gross Accumulation
Swiss Franc Class A-H (hedged) – Gross Accumulation
Swiss Franc Class C – Gross Accumulation
Swiss Franc Class C-H (hedged) – Gross Accumulation
Swiss Franc Class J – Gross Accumulation
Swiss Franc Class J-H (hedged) – Gross Accumulation
Swiss Franc Class Z – Gross Accumulation
Swiss Franc Class Z-H (hedged) – Gross Accumulation
Singapore Dollar Class A–Gross Accumulation and Gross Income
Singapore Dollar Class A-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class C– Gross Accumulation and Income
Singapore Dollar Class C-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class J–Gross Accumulation and Gross Income
Singapore Dollar Class J-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class Z–Gross Accumulation and Gross Income
Singapore Dollar Class Z-H (hedged) –Gross Accumulation and Gross Income
Investment minima (Euro Share Classes)
Lump sum initial investment Class A: €1,000 Class A-H: €1,000 Class B: €1,000 Class B-H: €1,000 Class C: €500,000 Class C-H: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: €75 Class A-H: €75 Class B: €75 Class B-H: €75 Class C: €50,000
Class C-H: €50,000 Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: €1,000 Class A-H: €1,000 Class B: €1,000 Class B-H: €1,000 Class C: €500,000 Class C-H: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class B: n/a Class B-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: €75
Class A-H: €75 Class B: €75 Class B-H: €75 Class C: €50,000
Class C-H: €50,000 Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: $75 Class A-H: $75 Class C: $50,000
Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: $75
Class A-H: $75 Class C: $50,000 Class C-H: $50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class A-H: S$1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: S$75 Class A-H: S$75 Class C: S$50,000
Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: S$1,000 Class A-H: S$1,000 Class C: S$500,000 Class C-H: S$500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Redemption Class A: S$75
Class A-H: S$75 Class C: S$50,000 Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 4.00%
Class A-H: 4.00%
Class B: nil
Class B-H: 1.25%
Class C: 1.25%
Class C-H: 1.25%
Class J: 1.25%
Class J-H: 1.25%
Class Z: 1.25%
Class Z-H: 1.25%
Redemption charge Class A: n/a Class A-H: n/a Class B: n/a Class B-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1.25% Class A-H: 1.25%
Class B: 1.75%
Class B-H: 1.75%
Class C: 0.60%
Class C-H: 0.60%
Class J: up to 0.60% Class J-H: up to 0.60% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class B: 0.15%
Class B-H: 0.15%
Class C: 0.15%
Class C-H: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
ACD’s share class hedging fee Class A-H: 0.01% to 0.055% Class B-H: 0.01% to 0.055%
Class C-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares Income Shares
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | 100% to Income | 100% to Capital |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly debt instruments issued by emerging market borrowers over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: U.S. Dollar
Product Reference Number: 642958
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
4.3 M&G European Corporate Bond Fund
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in investment grade corporate bonds denominated in any European currency. The Fund may also invest in high yield corporate bonds, government and public securities denominated in any European currency. The Fund’s exposure to bonds, government and other public securities may be gained through the use of derivatives. Derivatives may also be used for efficient portfolio management. The Fund may also invest in collective investment schemes, other transferable securities, cash, near cash, other money market instruments, warrants and other derivative instruments which may be denominated in any major global currency. More than 70% of the Fund will be in euro or hedged back to euro.
Investment Approach
The fund manager believes that bond returns are driven by a combination of macroeconomic, asset, sector, geography and stock-level factors. A dynamic investment approach is followed, allowing the fund manager to change the blend of duration and credit exposure based on the outlook. A high level of diversification, across individual issuers, sectors and geographies is an essential part of the investment process.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Share classes/types in issue or available
for issue*: Euro Class A – Gross Accumulation and Gross Income
Euro Class B – Gross Accumulation
Euro Class C – Gross Accumulation and Gross Income
Euro Class J– Gross Accumulation and Gross Income
Euro Class J-H (hedged) – Gross Accumulation and Gross Income
Euro Class Z– Gross Accumulation and Gross Income
Euro Class Z-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class A – Gross Accumulation and Gross Income
U.S. Dollar Class A-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class C – Gross Accumulation and Gross Income
U.S. Dollar Class C-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class J – Gross Accumulation and Gross Income
U.S. Dollar J-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class Z – Gross Accumulation and Gross Income
U.S. Dollar Class Z-H (hedged) – Gross Accumulation and Gross Income
Swiss Franc Class A – Gross Accumulation
Swiss Franc Class A-H (hedged) – Gross Accumulation
Swiss Franc Class C – Gross Accumulation
Swiss Franc Class C-H (hedged) – Gross Accumulation
Swiss Franc Class J – Gross Accumulation
Swiss Franc Class J-H (hedged) – Gross Accumulation
Swiss Franc Class Z – Gross Accumulation
Swiss Franc Class Z-H (hedged) – Gross Accumulation
Singapore Dollar Class A – Gross Accumulation and Gross Income
Singapore Dollar Class A-H (hedged) – Gross Accumulation and Gross Income
Singapore Dollar Class C – Gross Accumulation and Gross Income
Singapore Dollar Class C-H (hedged)– Gross Accumulation and Gross Income
Singapore Dollar Class J–Gross Accumulation and Gross Income
Singapore Dollar Class J-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class Z–Gross Accumulation and Gross Income
Singapore Dollar Class Z-H (hedged) –Gross Accumulation and Gross Income
Investment minima (Euro Share Classes)
Lump sum initial investment Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: €75 Class B: €250 Class C: €50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: €75 Class B: €75 Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: €75
Class B†: €150 Class C: €50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: $75 Class A-H: $75 Class C: $50,000
Class C-H: $50,000 Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: $75
Class A-H: $75 Class C: $50,000 Class C-H: $50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Redemption Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class A-H: S$1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: S$75 Class A-H: S$75 Class C: S$50,000
Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: S$1,000 Class A-H: S$1,000 Class C: S$500,000 Class C-H: S$500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Redemption Class A: S$75
Class A-H: S$75 Class C: S$50,000 Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 3.25%
Class A-H: 3.25%
Class B: nil Class C: 1.25%
Class C-H: 1.25%
Class J: 1.25%
Class J-H: 1.25%
Class Z: 1.25%
Class Z-H: 1.25%
Redemption charge Class A: n/a Class A-H: n/a Class B: 1% Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1% Class A-H: 1%
Class B: 1.5%
Class C: 0.5%
Class C-H: 0.5% Class J: up to 0.5% Class J-H: up to 0.5% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class B: 0.15%
Class C: 0.15%
Class C-H: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
ACD’s share class hedging fee Class A-H: 0.01 to 0.055% Class C-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | 100% to Income | 100% to Capital |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly investment grade corporate bonds denominated in any European currency over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 13 January 2003
Valuation Currency: Euro
Product Reference Number: 642955
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
4.4 M&G European High Yield Bond Fund.
Investment Objective
The Fund aims to provide income and capital growth.
Investment Policy
At least 70% of the Fund is invested in higher yielding debt instruments denominated in any European currency and will normally be managed to give investors exposure to European currencies. The Fund’s exposure to higher yielding debt instruments may be gained through the use of derivatives. Derivatives may also be used for efficient portfolio management. The Fund may also invest in collective investment schemes, government and public securities and other transferable securities, cash, near cash, other money market instruments, warrants and other derivative instruments which may be denominated in any major global currency. Any non-European currency exposures within the Fund may be managed by currency xxxxxx in European currencies. More than 70% of the Fund will be in euro or hedged back to euro.
Investment Approach
The fund manager concentrates on bottom-up analysis of individual bond issues while remaining aware of macroeconomic developments. Emphasis is placed upon investigating the ability of a company or government to meet its interest payments, especially during unfavourable economic conditions. Credit risk is constantly monitored and typically spread across a variety of countries and industrial sectors.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 31 January (Interim); 30 April (Interim); 31 July (Interim)
Share classes/types in issue or available
for issue: Euro Class A – Gross Accumulation and Gross Income
Euro Class B – Gross Accumulation and Gross Income
Euro Class C – Gross Accumulation and Gross Income
Euro Class J– Gross Accumulation and Gross Income
Euro Class J-H (hedged) – Gross Accumulation and Gross Income
Euro Class Z– Gross Accumulation and Gross Income
Euro Class Z-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class A – Gross Accumulation and Gross Income
U.S. Dollar Class A-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class C – Gross Accumulation and Gross Income
U.S. Dollar Class C-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class J – Gross Accumulation and Gross Income
U.S. Dollar J-H (hedged) – Gross Accumulation and Gross Income
U.S. Dollar Class Z – Gross Accumulation and Gross Income
U.S. Dollar Class Z-H (hedged) – Gross Accumulation and Gross Income
Swiss Franc Class A – Gross Accumulation
Swiss Franc Class A-H (hedged) – Gross Accumulation
Swiss Franc Class C – Gross Accumulation
Swiss Franc Class C-H (hedged) – Gross Accumulation
Swiss Franc Class J – Gross Accumulation
Swiss Franc Class J-H (hedged) – Gross Accumulation
Swiss Franc Class Z – Gross Accumulation
Swiss Franc Class Z-H (hedged) – Gross Accumulation
Singapore Dollar Class A–Gross Accumulation and Gross Income
Singapore Dollar Class A-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class C– Gross Accumulation and Gross Income
Singapore Dollar Class C-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class J–Gross Accumulation and Gross Income
Singapore Dollar Class J-H (hedged) –Gross Accumulation and Gross Income
Singapore Dollar Class Z–Gross Accumulation and Gross Income
Singapore Dollar Class Z-H (hedged) –Gross Accumulation and Gross Income
Investment minima (Euro Shares Classes)
Lump sum initial investment Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: €75 Class B: €75 Class C: €50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: €75 Class B: n/a Class C: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: €75
Class B: €75 Class C: €50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: $75 Class A-H: $75 Class C: $50,000
Class C-H: $50,000 Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: $1,000 Class A-H: $1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: $75
Class A-H: $75 Class C: $50,000 Class C-H: $50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: CHF1,000 Class A-H: CHF1,000 Class C: CHF500,000 Class C-H: CHF500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Regular saving (per month) Class A: n/a Class A-H: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Redemption Class A: CHF75
Class A-H: CHF75 Class C: CHF50,000 Class C-H: CHF50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class A-H: S$1,000 Class C: $500,000 Class C-H: $500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum subsequent investment Class A: S$75 Class A-H: S$75 Class C: S$50,000
Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Lump sum holding Class A: S$1,000 Class A-H: S$1,000 Class C: S$500,000 Class C-H: S$500,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Redemption Class A: S$75
Class A-H: S$75 Class C: S$50,000 Class C-H: S$50,000
Class J: On application Class J-H: On application Class Z: On application Class Z-H: On application
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 3.25%
Class A-H: 3.25%
Class B: nil Class C: 1.25%
Class C-H: 1.25%
Class J: 1.25%
Class J-H: 1.25%
Class Z: 1.25%
Class Z-H: 1.25%
Redemption charge Class A: n/a Class A-H: n/a Class B: n/a Class C: n/a Class C-H: n/a Class J: n/a Class J-H: n/a Class Z: n/a Class Z-H: n/a
Annual Management Charge Class A: 1.25% Class A-H: 1.25%
Class B: 1.75%
Class C: 0.75%
Class C-H: 0.75%
Class J: up to 0.75% Class J-H: up to 0.75% Class Z: nil
Class Z-H: nil
Administration Charge Class A: 0.15% Class A-H: 0.15%
Class B: 0.15%
Class C: 0.15%
Class C-H: 0.15%
Class J: 0.15%
Class J-H: 0.15%
Class Z: 0.15%
Class Z-H: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
ACD’s share class hedging fee Class A-H: 0.01% to 0.055% Class C-H: 0.01% to 0.055%
Class J-H: 0.01% to 0.055%
Class Z-H: 0.01% to 0.055%
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | 100% to Income | 100% to Capital |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital whilst generating a high level of income from a portfolio of mainly higher yielding debt instruments denominated in any European currency over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Euro
Product Reference Number: 642956
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
4.5 M&G Global Government Bond Fund.
Investment Objective
The Fund aims to maximise total return (the combination of income and growth of capital).
Investment Policy
The portfolio will mainly consist of investment grade government debt securities, including government guaranteed debt securities, and will be invested on a global basis. The Fund’s exposure to investment grade government debt may be gained through the use of derivatives. The Fund may also invest in other government and public securities, collective investment schemes, other transferable securities, other debt instruments, cash and near cash, deposits, warrants, money market instruments and other derivative instruments. The Fund may use derivatives for Efficient Portfolio Management purposes.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Euro Class A – Gross Accumulation and Gross Income
Euro Class C – Gross Accumulation and Gross Income
Euro Class J– Gross Accumulation and Gross Income
Euro Class Z– Gross Accumulation and Gross Income
U.S. Dollar Class A – Gross Accumulation and Gross Income
U.S Dollar Class C – Gross Accumulation and Gross Income
U.S. Dollar Class J – Gross Accumulation and Net Income
U.S. Dollar Class Z – Gross Accumulation and Net Income
Swiss Franc Class A – Gross Accumulation Swiss Franc Class C – Gross Accumulation Swiss Franc Class J – Gross Accumulation
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: $75 Class C: $50,000
Class J: On application Class Z: On application
Lump sum holding Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Redemption Class A: $75
Class C: $50,000 Class J: On application Class Z: On application
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class C: CHF500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Lump sum holding Class A: CHF1,000 Class C: CHF500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Swiss Franc Class Z – Gross Accumulation
Singapore Dollar Class A- Gross Accumulation
and Gross Income
Singapore Dollar Class C– Gross Accumulation and Gross Income
Singapore Dollar Class J – Gross Accumulation and Gross Income
Singapore Dollar Class Z – Gross Accumulation
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class C: $500,000 Class J: On application Class Z: On application
and Gross Income
Lump sum subsequent investment Class A: S$75
Investment minima (Euro Share Classes)
Lump sum initial investment Class A: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: €75 Class C: €50,000
Class J: On application Class Z: On application
Lump sum holding Class A: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Redemption Class A: €75
Class C: €50,000 Class J: On application Class Z: On application
Class C: S$50,000 Class J: On application Class Z: On application
Lump sum holding Class A: S$1,000 Class C: S$500,000 Class J: On application Class Z: On application
Redemption Class A: S$75
Class C: S$50,000 Class J: On application Class Z: On application
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 4.00%
Class C: 1.25%
Class J: 1.25%
Class Z: 1.25%
Redemption charge Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.00% Class C: 0.50% Class J: up to 0.50% Class Z: nil
Administration Charge Class A: 0.15% Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain a combination of income and growth of capital from a portfolio of mainly investment grade government debt securities, including government guaranteed debt securities, over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: U.S. Dollar
Product Reference Number: 642964
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
The Fund was created as a result of the conversion of The M&G International Sovereign Bond Fund unit trust which had been launched on 4 October 1999. The last significant change to the Fund’s investment objective and/or investment policy occurred on 1 July 2014, when it was also renamed.
4.6 M&G Recovery Fund.
Investment objective and policy
The Fund predominantly invests in a diversified range of securities issued by companies which are out of favour, in difficulty or whose future prospects are not fully recognised by the market. The sole aim of the Fund is capital growth. There is no particular income yield target.
Other information:
The Fund is not a feeder UCITS and will not hold units in a feeder UCITS.
Performance Comparator: FTSE All Share Index
The Fund is actively managed. The index is a point of reference against which the performance of the Fund may be measured.
Accounting reference date: 30 June
Income allocation date: On or before 31 October (Final); 30 April (Interim)
Share classes/types in issue or available
for issue*: Euro Class A – Net Accumulation and Net Income
Euro Class B – Net Accumulation and Net Income
Euro Class C – Net Accumulation and Net Income
Euro Class J– Net Accumulation and Net Income
Euro Class Z– Net Accumulation and Net Income
U.S. Dollar Class A – Net Accumulation and Net Income
U.S. Dollar Class C – Net Accumulation and Net Income
U.S. Dollar Class J – Net Accumulation and Net Income
U.S. Dollar Class Z – Net Accumulation and Net Income
Swiss Franc Class A – Net Accumulation and Net Income
Swiss Franc Class C – Net Accumulation and Net Income
Swiss Franc Class J – Net Accumulation
Swiss Franc Class Z – Net Accumulation
Singapore Dollar Class A – Gross Accumulation and Gross Income
Singapore Dollar Class C – Gross Accumulation and Gross Income
Singapore Dollar Class J – Gross Accumulation and Gross Income
Singapore Dollar Class Z – Gross Accumulation and Gross Income
Investment minima (Euro Share Classes)
Lump sum initial investment Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: €75 Class B: €250 Class C: €50,000
Class J: On application Class Z: On application
Lump sum holding Class A: €1,000 Class B: €1,000 Class C: €500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: €75 Class B: €75 Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: €75
Class B: €150 Class C: €50,000
Class J: On application Class Z: On application
Investment minima (U.S. Dollar Share Classes)
Lump sum initial investment Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: $75 Class C: $50,000
Class J: On application Class Z: On application
Lump sum holding Class A: $1,000 Class C: $500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: $75
Class C: $50,000 Class J: On application Class Z: On application
Investment minima (Swiss Franc Share Classes)
Lump sum initial investment Class A: CHF1,000 Class C: CHF500,000
Class J: On application Class Z: On application
Lump sum subsequent investment Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Lump sum holding Class A: CHF1,000 Class C: CHF500,000
Class J: On application Class Z: On application
Regular saving (per month) Class A: n/a Class C: n/a Class J: n/a Class Z: n/a
Redemption Class A: CHF75
Class C: CHF50,000
Class J: On application Class Z: On application
Investment minima (Singapore Dollar Share Classes)
Lump sum initial investment Class A: S$1,000 Class C: $500,000 Class J: On application Class Z: On application
Lump sum subsequent investment Class A: S$75 Class C: S$50,000
Class J: On application Class Z: On application
Lump sum holding Class A: S$1,000 Class C: S$500,000 Class J: On application Class Z: On application
Redemption Class A: S$75
Class C: S$50,000 Class J: On application Class Z: On application
Charges and Expenses (Euro, U.S. Dollar, Swiss Franc and Singapore Dollar Share Classes)
Initial charge Class A: 5.25%
Class B: nil Class C: 3.25%
Class J: 3.25%
Class Z: 3.25%
Redemption charge Class A: n/a Class B: 1% Class C: n/a Class J: n/a Class Z: n/a
Annual Management Charge Class A: 1.5% Class B: 1.75%
Class C: 0.75% Class J: up to 0.75% Class Z: nil
Administration Charge Class A: 0.15% Class B: 0.15%
Class C: 0.15%
Class J: 0.15%
Class Z: 0.15%
Depositary Charge See section 28.4
Custody Charge See section 28.5
Custody Transaction Charges See section 28.6
Allocation of Charges
Accumulation Shares | Income Shares | |
Annual Management Charge | 100% to Income | 100% to Capital |
Administration Charge | 100% to Income | 100% to Capital |
Share Class Hedging Charge | N/A | N/A |
Depositary’s Charge | 100% to Income | 100% to Income |
Annual Custody Charge | 100% to Income | 100% to Income |
Custody Transaction Charges | 100% to Capital | 100% to Capital |
Expenses | 100% to Income | 100% to Income |
Portfolio Transaction Charges | 100% to Capital | 100% to Capital |
Please note the above Charges and Expenses section is a summary and does not set out all charges and expenses payable by the Sub-funds. For further detail and an explanation of the terms used, please see section 28 above.
Investor Profile
The Fund is suitable for retail and institutional investors seeking to gain growth of capital from a portfolio of diversified securities issued by companies which are out of favour, in difficulty or whose future prospects are not fully recognised by the market, over the long term, but who appreciate that their capital will be at risk and that the value of their investment and any derived income may fall as well as rise.
Investment Manager: M&G Investment Management Limited
Valuation point: 12.00 noon UK time
Launch date: 7 March 2002
Valuation Currency: Sterling
Product Reference Number: 642963
* Please see xxx.xxxxx.xxx/xxxxxxxxxxxxxx for details of which share classes are currently being issued.
Note to investors in France
The M&G Recovery Fund is eligible to participate in the savings plan in France (PEA). The Fund is required, at all times, to invest at least 75% of its net assets in securities which are eligible for the PEA.
Appendix 5 –
Sterling Performance Bar Charts
Past performance is not a guide to future performance.
M&G Corporate Bond Fund Bar Chart
M&G Dividend Fund Bar Chart
18.3
11.3
10.4
8.9
7.0
8.2
4.8
-1.3
-0.3
-0.3
20 to end December each year
16
12
8
4
0
M&G Corporate Bond Fund
34
24
14
4
-6
-16
-26
30.1
20.8
16.3
17.6
13.6 14.5
15.7
12.3
16.8
13.1
7.3 7.4
9.0
0.5 1.2
1.0
-5.9 -3.5
-23.8
-29.9
M&G Dividend FTSE All-Share Index
to end December each year
M&G Dividend Fund
-4
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
-36
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
The cumulative performance over the last 10 years is 88.6% The cumulative performance over the last 10 years is 62.8%
The cumulative performance for the FTSE All Share Index is 84.5%
M&G Emerging Markets Bond Fund Bar Chart M&G European Corporate Bond Fund Bar Chart
35
30
25
20
15
10
5
0
-5
-10
to end December each year
M&G Emerging Markets Bond Fund
30.3
31.6
13.7
8.2
10.5
3.0
0.9
3.2
2.9
-3.4
30
25
20
15
10
5
0
-5
-10
23.6
21.6
9.3
9.6
5.5
6.6
1.5
-1.9
-0.2
-7.2
to end December each year
M&G European Corporate Bond Fund
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
The cumulative performance over the last 10 years is 148.2% The cumulative performance over the last 10 years is 86.6%
M&G European High Yield Bond Fund Bar Chart M&G Fund of Investment Trust Shares Bar Chart
40
35
30
25
20
15
10
5
0
-5
-10
to end December each year
M&G European High Yield Bond Fund
35.1
21.2
21.4
10.5
9.2
5.3
-3.9
-3.3
-7.3
-4.5
50
40
30
20
10
0
-10
-20
-30
-40
-50
37.9
32.0
23.1 21.8
23.6
19.1 18.9
12.1
14.8
15.3 16.6
18.4
7.1 7.5
4.0
5.2
-11.3 -9.2
-35.4
-39.2
M&G Fund of Investment Trust Shares FTSE All-Share Equity Investment Instruments Index
to end December each year
M&G Fund of Investment Trust Shares
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
The cumulative performance over the last 10 years is 107.8% The cumulative performance over the last 10 years is 85.8%
The cumulative performance for the FTSE All Share Equity Investment Instruments Index is 109.9%
Appendix 5 –
Sterling Performance Bar Charts
Past performance is not a guide to future performance.
M&G Global Government Bond Fund Bar Chart
M&G Recovery Fund Bar Chart
57.6
28.6
10.1 10.7
0.9
5.1
0.4
0.4
-9.0
-9.6
70 to end December each year M&G Global Government Bond Fund
60
50
40
30
20
10
0
-10
-20
50
40
30
20
10
0
-10
-20
-30
-40
40.9
30.1
20.8
16.5 14.5
12.3 14.1
19.8
16.8
8.7
10.7
13.1
1.2 1.0
-6.3
-3.5
-5.2
-9.6
-27.5-29.9
M&G Recovery Fund FTSE All-Share Index
to end December each year
M&G Recovery Fund
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
The cumulative performance over the last 10 years is 117.4% The cumulative performance over the last 10 years is 57.2%
The Cumulative performance for the FTSE All Share Index is 84.5%
M&G Smaller Companies Fund Bar Chart
M&G Smaller Companies Fund Numis Smaller Companies Ex IT Index
60.7
55.8
38.5 36.9
30.1 28.5
26.9 29.9
27.5
16.3
19.5
10.6
11.1
3.1
-1.9
-10.5 -9.1
-8.9
-41.4-40.8
80 to end December each year
M&G Smaller Companies Fund
60
40
20
0
-20
-40
-60
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, sterling Share Class A
The cumulative performance over the last 10 years is 160.4%
The cumulative performance for the Numis Smaller Companies Index is 184.7%
Appendix 5a –
Euro Performance Bar Charts
Past performance is not a guide to future performance.
M&G Corporate Bond Fund Bar Chart
M&G European Corporate Bond Fund Bar Chart
30
20
10
0
-10
-20
-30
to end December each year
M&G Corporate Bond Fund
28.5
18.6
11.1
12.8
14.8
6.0
1.1
-2.0
-7.0
-24.0
25
20
15
10
5
0
-5
-10
to end December each year M&G European Corporate Bond Fund
18.8
13.0
5.4
7.2
3.8
4.4
1.7
3.2
-1.4
-4.6
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, euro Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, euro Share Class A
The cumulative performance over the last 10 years is 62.5% The cumulative performance over the last 10 years is 62.1%
M&G European High Yield Bond Fund Bar Chart M&G Global Government Bond Bar Chart
60
50
40
30
20
10
0
-10
-20
-30
to end December each year M&G European High Yield Bond Fund
48.3
26.0
10.0
9.4
3.0
3.2
4.6
5.6
-3.3
-25.3
25
20
15
10
5
0
-5
-10
-15
to end December each year M&G Global Government Bond Fund
20.3
14.6
14.0
12.7
10.5
4.2
6.5
-0.7
-2.8
-11.6
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, euro Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, euro Share Class A
The cumulative performance over the last 10 years is 91.1% The cumulative performance over the last 10 years is 85.3%
M&G Recovery Fund Bar Chart
51.9
41.6
20.1 18.7
15.7
11.6 11.7
17.8
8.5
6.3
7.1 8.8
0.5
2.6 0.8
-3.5 -1.0
-3.3
-44.5-46.8
M&G Recovery Fund FTSE All-Share Index
60 to end December each year
M&G Recovery Fund
40
20
0
-20
-40
-60
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, income reinvested, euro Share Class A
The cumulative performance over the last 10 years is 30.1%
The Cumulative performance for the FTSE All Share Index is 52.6%
Appendix 5b –
U.S. Dollar Performance Bar Charts
Past performance is not a guide to future performance.
M&G Emerging Markets Bond Fund Bar Chart (USD Share Class A)
M&G European Corporate Bond Fund Bar Chart (USD Share Class A-H)
20
10
0
-10
to end December each year
M&G Emerging Markets Bond Fund
7 to end December each year
16.8
13.8
13.0
11.3 10.2
5.2
0.9
-0.7
-1.1
-5.2
5.8
5.2
-1.1
6
5
4
3
2
1
0
-1
-2
M&G European Corporate Bond Fund
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, USD Share Class A
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, years since launch, % return, price to price, gross income reinvested, USD Share Class A-H
The cumulative performance over the last 10 years is 84.9% The cumulative performance since launch is 12.6%
M&G European High Yield Bond Fund Bar Chart (USD Share Class A-H)
M&G Global Government Bond Fund Bar Chart (USD Share Class A)
7.8
6.0
3.6
9 to end December each year
8
7
6
5
4
3
2
1
0
M&G European High Yield Bond Fund
20 to end December each year
14.4
10.3
10.3
7.1
5.8
7.2
2.5
-0.9
-7.6
-4.5
15
10
5
0
-5
-10
M&G Global Government Bond Fund
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, years since launch, % return, price to price, gross income reinvested, USD Share Class A-H
The cumulative performance since launch is 17.6 %
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, USD Share Class A
The cumulative performance over the last 10 years is 51.6%
Appendix 5c –
Swiss Franc Performance Bar Charts
Past performance is not a guide to future performance.
M&G European Corporate Bond Fund Bar Chart (Swiss Franc Class A-H)
M&G Emerging Markets Bond Fund Bar Chart (Swiss Franc Class A)
6.9
3.6
3.8
2.7
-2.4
8 to end December each year
6
4
2
0
-2
M&G European Corporate Bond Fund
20 to end December each year
16.8
13.5
11.5
13.0
8.2
0.3
1.2
-0.7
-3.8
-10.7
15
10
5
0
-5
-10
M&G Emerging Markets Bond Fund
-4
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, years since launch, % return, price to price, gross income reinvested, Swiss Franc Share Class A-H
-15
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, last 10 years, % return, price to price, gross income reinvested, Swiss Franc Share Class A
The cumulative performance since launch is 18.3% The cumulative performance over the past 10 years is 56.6%
M&G Global Government Bond Fund Bar Chart (Swiss Franc Class A)
M&G European High Yield Bond Fund Bar Chart (Swiss Franc Class A-H)
9.9
5.8
-4.1
12 to end December each year
10
8
6
4
2
0
-2
-4
-6
M&G Global Government Bond Fund
6 to end December each year
5.2
4.1
5
4
3
2
1
0
M&G European High Yield Bond Fund
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, years since launch, % return, price to price, gross income reinvested, Swiss Franc Share Class A
The cumulative performance since launch is 18.1%
Dec 07- Dec 08- Dec 09- Dec 10- Dec 11- Dec 12- Dec 13- Dec 14- Dec 15- Dec 16-
Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17
Source: Morningstar Inc, years since launch, % return, price to price, gross income reinvested, Swiss Franc Share Class A-H
The cumulative performance since launch is 10.4%
Appendix 6 –
List of Sub-Custodians
Albania: Raiffeisen Bank sh.a., Tirana
Argentina: Citibank N.A., Buenos Aires
Australia: Hong Kong and Shanghai Banking Corporation
Limited, Sydney
Austria: 1) UniCredit Bank Austria AG, Vienna
2) Deutsche Bank AG, Vienna
Bahamas: n/a
Bahrain: HSBC Bank Middle East, Al Seef Bangladesh: Standard Chartered Bank, Dhaka Belgium: Deutsche Bank AG, Amsterdam branch
(operating through the Amsterdam branch with support from its Brussels branch)
Benin: Standard Chartered Bank Côte d’Ivoire, Abidjan
Bermuda: HSBC Bank Bermuda Limited, Xxxxxxxx
Bosnia-Herzegovina:
The Federation of Bosnia and
Herzegovina: UniCredit Bank d.d., Sarajevo
Botswana: Standard Chartered Bank of Botswana Limited,
Gaborone
Brazil: Xxxxxxxx X.X. Xxx Xxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxxx: 1) Citibank Europe plc, Sofia
2) UniCredit Bulbank AD, Sofia
Burkina Faso: Standard Xxxxxxxxx Xxxx Xxxx x’Xxxxxx, Xxxxxxx
Xxxxxx: 1) State Street Trust Company Canada, Toronto (Depositary transactions)
France: Deutsche Bank AG, Amsterdam branch (operating through the Amsterdam branch with support from its Paris branch)
Georgia: JSC Bank of Georgia, Tbilisi
Germany: 1) State Street Bank International GmbH, Munich
2) Deutsche Bank AG, Eschborn
Ghana: Standard Chartered Bank Ghana Limited, Accra
Greece: BNP Paribas Securities Services, S.C.A., Athens
Guernsey: n/a
Guinea Bissau: Standard Xxxxxxxxx Xxxx Xxxx x’Xxxxxx, Xxxxxxx
Xxxx Xxxx: Standard Chartered Bank (Hong Kong) Limited,
Hong Kong
Hungary: 1) Citibank Europe plc, Hungarian Branch, Budapest
2) UniCredit Bank Hungary Zrt., Budapest
Iceland: Landsbankinn hf, Reykjavik
India: 1) Xxx Xxxx Xxxx xxx Xxxxxxxx Xxxxxxx Xxxxxxxxxxx Xxxxxxx, Xxxxxx
0) Xxxxxxxx Xxxx XX, Xxxxxx
Xxxxxxxxx: Deutsche Bank A.G., Jakarta
Ireland: State Street Bank and Trust Company, Edinburgh
Isle of Man: n/a
Israel: Bank Hapoalim B.M., Tel Aviv
Italy: 1) Deutsche Bank S.p.A., Milan
2) Intesa Sanpaolo (ISP), Xxxxx
Xxxxx Coast: Standard Chartered Bank Côte d’Ivoire, Abidjan
2) RBC Investor Services, Toronto (Physical
transaction)
Cayman Islands: n/a
Channel Islands: n/a
Chile: Itau CorpBanca S.A., Xxxxxxxx de Chile
China 1) China Construction Bank (A shares), Beijing
A-Share Market: 2) HSBC Bank (China) Company Limited, Shanghai
China HSBC Bank (China) Company Limited, Shanghai B-Share Market:
China-Shanghai 1) Standard Chartered Bank (Hong Kong)
Hong Kong Limited, Hong Kong
Stock Connect: 2) The Hong Kong and Shanghai Banking Corporation Limited, Hong Kong
3) Citibank N.A., Hong Kong
Clearstream: State Street is a direct participant in Clearstream
Banking Luxembourg. State Street does not use a subcustodian bank.
Colombia: Cititrust Colombia S.A. Sociedad Fiduciaria,
Bogota
Costa Rica: Banco BCT S.A., San Xxxx
Croatia: 1) Privredna Banka Zagreb d.d, Zagreb
2) Zagrebacka banka d.d., Zagreb
Curaçao: n/a
Cyprus: BNP Paribas Securities Services, S.C.A., Athens (operating remotely to service the Cyprus market)
Czech Republic: 1) Ceskoslovenská Obchodní Banka A.S., Prague
2) UniCredit Bank Czech Republic and Slovakia, a.s., Praha
Denmark: 1) Skandinaviska Enskilda Banken AB (SEB),
Copenhagen
2) Nordea Bank Danmark A/S, Copenhagen
Ecuador: n/a
Egypt: HSBC Bank Egypt S.A.E, Cairo
Estonia: AS SEB Pank, Tallinn
Ethiopia: n/a
Euroclear: Since State Street is a direct participant in
Jamaica: Scotia Investments Jamaica Limited, Kingston
Japan: 1) Xxxxxx Xxxx, Xxx, Xxxxx
0) Xxx Xxxx Xxxx xxx Xxxxxxxx Xxxxxxx Xxxxxxxxxxx, Xxxxx branch (HSBC), Tokyo
Jersey: n/a
Xxxxxx: Standard Xxxxxxxxx Xxxx, Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxxx: XXX Xxxxxxxx Xxxxxxxxxx, Xxxxxx
Xxxxx: Standard Chartered Bank Kenya Limited, Nairobi
Kuwait: HSBC Bank Middle East Limited, Kuwait
Latvia: AS SEB Banka, Riga
Lebanon: HSBC Bank Middle East Limited, Beirut
Liechtenstein: n/a
Lithuania: SEB Bankas, Vilnius
Luxembourg: Since State Street is a direct participant in
Clearstream Banking Luxembourg, State Street does not use a subcustodian bank. Luxembourg domiciled assets may be held in either the Euroclear or Clearstream ICSDs.
Macedonia (Republic
of Macedonia): n/a
Malawi: Standard Bank Limited, Blantyre
Malaysia: 1) Standard Chartered Bank Malaysia Berhad
Menara Standard Chartered, Kuala Lumpur
2) Deutsche Bank (Malaysia) Berhad Investor Services, Kuala Lumpur
Mali: Standard Chartered Bank Côte d’Ivoire, Abidjan
Malta: n/a
Xxxxxxxx Islands: n/a
Mauritius: Hong Kong and Shanghai Banking Corp. Limited,
Ebene
Mexico: Banco Nacional de México S.A. (Banamex) Global Securities Services, Mexico City
Morocco: Citibank Maghreb, Casablanca
Mozambique: n/a
Euroclear Bank, State Street does not use a
subcustodian bank.
Finland: 1) Skandinaviska Enskilda Banken AB (publ) (SEB), Helsinki
2) Nordea Bank Finland Plc, Helsinki
Namibia: Standard Bank Namibia Limited, Windhoek
Netherlands: Deutsche Bank AG, Amsterdam branch
New Zealand: The Hong Kong and Shanghai Banking Corp.
Limited, Auckland
Appendix 6 –
List of Sub-Custodians
Niger: Standard Xxxxxxxxx Xxxx Xxxx x’Xxxxxx, Xxxxxxx
Xxxxxxx: Xxxxxxx XXXX Xxxx Xxx., Xxxxx
Xxxxxx Xxxx Xxxxxxxx Xxx Xxxxx Securities
Exchange-ADX: HSBC Bank Middle East Limited Global Banking
Norway: 1) Skandinaviska Enskilda Banken, Oslo (operating through its Oslo branch)
and Markets, Dubai
United Arab Emirates
2) Nordea Bank Norge ASA, Oslo
Oman: HSBC Bank Oman S.A.O.G, Seeb
Pakistan: Deutsche Bank AG, Karachi
-DFM: HSBC Bank Middle East Limited Global Banking and Markets, Dubai
United Arab Emirates
-NASDAQ : HSBC Bank Middle East Limited Global Banking
Palestine: HSBC Bank Middle East Limited, Ramallah
Panama: Xxxxxxxx, X.X., Xxxxxx Xxxx
Xxxx: Citibank del Perú S.A., Lima
Philippines: Deutsche Bank AG, Investor Services, Makati City
Poland: 1) Bank Handlowy w Warszawie S.A., Warsaw
2) Bank Polska Kasa Opieki S.A., Warsaw
Portugal: Deutsche Bank AG, Amsterdam branch (operating
through the Amsterdam branch with support from its Lisbon branch)
Puerto Rico: Xxxxxxxx, X.X. Xxxxxx Xxxx, Xxx Xxxx Xxxxx: HSBC Bank Middle East Limited, Doha Republic of Srpska: UniCredit Bank d.d, Sarajevo
Romania: Citibank Europe plc, Dublin – Romania Branch,
Bucharest
Russia: AO Citibank, Moscow
Rwanda: n/a
Saudi Arabia: HSBC Saudi Arabia Limited, Riyadh
Senegal: Standard Chartered Bank Côte d’Ivoire, Abidjan
Serbia: Unicredit Bank Serbia JSC Belgrade
Singapore: 1) Citibank N.A., Singapore
2) United Overseas Bank Limited (UOB), Singapore
Slovak Republic: UniCredit Bank Czech Republic and Slovakia, a.s.,
Bratislava
Slovakia: n/a
Slovenia: XxxXxxxxx Xxxxx Xxxxxxxxx x.x., Xxxxxxxxx
Xxxxx Xxxxxx: 1) Standard Bank of South Africa Limited,
Johannesburg
2) FirstRand Bank Limited, Johannesburg
South Korea: 1) Deutsche Bank AG, Seoul
2) Hong Kong and Shanghai Banking Corp. Limited, Seoul
Spain: Deutsche Bank SAE Investor Services, Madrid
Sri Lanka: Xxx Xxxx Xxxx xxx Xxxxxxxx Xxxxxxx Xxxxxxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxxxx: Standard Bank Swaziland Limited, Mbabane
Sweden: 1) Nordea Bank AB (publ), Stockholm
2) Skandinaviska Enskilda Banken, Stockholm
Switzerland: 1) UBS Switzerland AG, Zurich
2) Credit Suisse AG, Zurich
Taiwan: 1) Deutsche Bank AG, Taipei
2) Standard Chartered Bank (Taiwan) Limited, Taipei
Tanzania: Standard Chartered Bank Tanzania Limited, Dar
es Salaam
Thailand: Standard Chartered Bank (Thai) Public Company
Limited, Bangkok
Togo: Standard Chartered Bank Côte d’Ivoire, Abidjan
Transnational: n/a
Trinidad & Tobago: n/a
Tunisia: Banque Internationale Arabe de Tunisie (BIAT), Tunis
Turkey: 1) Citibank A.S., Istanbul
2) Deutsche Bank A.S., Istanbul
Uganda: Standard Chartered Bank Uganda Limited, Kampala
Ukraine: PJSC Citibank, Kyiv
and Markets, Dubai
United Kingdom: Xxxxx Xxxxxx Xxxx xxx Xxxxx Xxxxxxx, Xxxxxxxxx
Xxxxxx Xxxxxx: 1) State Street Bank and Trust Company, Boston
2) DTCC Newport Office Center, Jersey City
Uruguay: Banco Itau Uruguay S.A., Montevideo
Venezuela: Citibank N.A., Caracas
Vietnam: Hong Kong & Shanghai Banking Corp. Ltd. Centre
Point, Xx Xxx Xxxx City
WAEMU (West African Economic and
Monetary Union): n/a
Zambia: Standard Chartered Bank Zambia Plc, Lusaka
Zimbabwe: Stanbic Bank Zimbabwe Limited, Harare
Directory
M&G Investment Funds (3)
The Company and Head Office:
M&G Investment Funds (3) Xxxxxxxx Xxxxxxxx Xxxx Xxxxxx
XX0X 0XX
Authorised Corporate Director:
M&G Securities Limited Xxxxxxxx Xxxxxxxx Xxxx Xxxxxx XX0X 0XX
Auditor:
Xxxxx & Young LLP Atria One
000 Xxxxxxxx Xxxxxx Xxxxxxxxx XX0 0XX Xxxxxx Xxxxxxx
Investment Managers:
M&G Investment Management Limited Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Custodian:
State Street Bank and Trust Company 00 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx Xxxxxx
X00 0XX
Depositary:
National Westminster Bank plc Trustee & Depositary Services Younger Building
1st Floor
3 Redheughs Avenue Edinburgh
EH12 9RH
Registrar:
DST Financial Services Europe Limited XX Xxx 0000
Xxxxxxxxxx XX00 0XX
Administrator for the M&G Securities International Nominee Service:
RBC Investor Services Bank S.A. 00 Xxxxx xx Xxxxxx
X-0000 Xxxx-xxx-Xxxxxxx Xxxxxxxxxx
57614
M&G Securities Limited is authorised and regulated by the Financial Conduct Authority and provides investment products. The company’s registered office is Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX. Registered in England number 90776.
M&G Investment Funds (7)
Issued by M&G Securities Limited 12 January 2018
Prospectus
M&G Investment Funds (7)
Prospectus
M&G Investment Funds (7)
This document constitutes the Prospectus for M&G Investment Funds (7) (the ‘Company’) which has been prepared in accordance with the Open- Ended Investment Companies Regulations 2001 and the rules contained in the Collective Investment Schemes Sourcebook published by the FCA as part of its Handbook of Rules and Guidance.
The Prospectus is dated and is valid as at 12 January 2018.
Copies of this Prospectus have been sent to the Financial Conduct Authority and National Westminster Bank plc as Depositary.
The Prospectus is based on information, law and practice at the date hereof but where it refers to any statutory provision or regulation this includes any modification or re-enactment that has been made. The Company is not bound by any out of date Prospectus when it has issued a new Prospectus and potential investors should check that they have the most recently published Prospectus.
M&G Securities Limited, the Authorised Corporate Director of the Company, is the person responsible for the information contained in this Prospectus. To the best of its knowledge and belief (having taken all reasonable care to ensure that such is the case) the information contained herein does not contain any untrue or misleading statement or omit any matters required by the Regulations to be included in it. M&G Securities Limited accepts responsibility accordingly. No person has been authorised by the Company to give any information or to make any representations in connection with the offering of Shares other than those contained in the Prospectus and, if given or made, such information or representations must not be relied on as having been made by the Company. The delivery of this Prospectus (whether or not accompanied by any reports) or the issue of Shares shall not, under any circumstances, create any implication that the affairs of the Company have not changed since the date hereof.
The distribution of this Prospectus and the offering of Shares in certain jurisdictions may be restricted. Persons into whose possession this Prospectus comes are required by the Company to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.
Warning: the contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to this offer. If you are in any doubt about the contents of this document you should obtain independent professional advice. In particular, no interest in the Fund will be issued to any person other than the person to whom this document is addressed. In addition, (a) no offer or invitation to subscribe for interests in the Fund may be made to the public in Hong Kong; and (b) this document has not been approved by the Securities and Futures Commission in Hong Kong or any other regulatory authority in Hong Kong and accordingly interests in the Fund may not be offered or sold in Hong Kong by means of this document, other than in circumstances which do not constitute an offer to the public for the purposes of the Hong Kong Securities and Futures Ordinance, as amended from time to time.
Shares in the Company are not listed on any investment exchange.
Potential investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters and are recommended to consult their own professional advisers concerning the acquisition, holding or disposal of Shares.
The provisions of the Instrument of Incorporation are binding on each of its Shareholders (who are taken to have notice of them).
This Prospectus has been approved for the purpose of section 21(1) of the Financial Services and Xxxxxxx Xxx 0000 by M&G Securities Limited.
The Depositary is not a person responsible for the information contained in this Prospectus and accordingly does not accept any responsibility therefore under the Regulations or otherwise.
If you are in any doubt about the contents of this Prospectus you should consult your professional adviser.
Contents
M&G Investment Funds (7)
Definitions 4
Operating Structure and Details 6
1 The Company 6
2 Company structure 6
3 Classes of Share within the Sub-fund 6
4 Management and administration 7
5 The Depositary 7
6 The Investment Manager 8
7 Administrator and Registrar 8
8 The Auditor 8
9 Register of Shareholders 8
10 Fund Accounting, Pricing and the Operation of Hedged Share Classes 8
11 Collateral Management 8
12 Buying Shares and Selling Shares – General Information 8
13 Buying and selling Shares on the main register of Shareholders 9
14 Buying and selling Shares via a Group Plan 10
15 Switching between Sub-funds and converting Shares 10
16 Dealing charges 11
17 Other dealing information 12
18 Money laundering 13
19 Restrictions on dealing 13
20 Suspension of dealings in the Company 13
21 Governing law 14
22 Valuation of the Company 14
23 Calculation of the Net Asset Value 14
24 Price per Share in a Sub-fund and each Class 15
25 Pricing basis 15
26 Publication of prices 15
27 Risk factors 15
28 Charges and Expenses 15
29 Stock lending 17
30 Shareholder meetings and voting rights 17
31 Taxation 18
32 Income equalisation 18
33 Winding up of the Company or a Sub-fund of the Company 18
34 General information 19
35 Tax Reporting 22
36 Preferential Treatment 22
37 Complaints 22
38 Marketing outside the UK 22
39 Markets for the Sub-fund 22
40 Genuine diversity of ownership 22
41 Remuneration policy 22
42 Risk factors 23
Appendix 1 – 29
Details of the Sub-funds of M&G Investment Funds (7)
Appendix 2 – 35
Investment management and borrowing powers of the Company
Appendix 3 – 46
Eligible Markets
Appendix 4 – 48
Information on non-sterling Share Classes
Appendix 5 – 57
Other collective investment schemes of the ACD
Appendix 6 – 58
Performance Bar Charts
Appendix 6a – 59
Euro Performance Bar Charts
Appendix 6b – 60
U.S. Dollar Performance Bar Charts
Appendix 6c – 61
Swiss Franc Performance Bar Charts
Appendix 6d – 62
Singapore Dollar Performance Bar Charts
Appendix 7 – 63
List of Sub-Custodians
Directory 65
Definitions
M&G Investment Funds (7)
Accumulation Share: a Share in the Company in respect of which income allocated thereto is credited periodically to capital pursuant to the Regulations;
ACD: M&G Securities Limited, the Authorised Corporate Director of the Company;
ACD Agreement: the agreement entered into between the Company and the ACD authorising the ACD to manage the affairs of the Company;
Approved Bank in relation to a bank account opened by the Company:
(a) if the account is opened at a branch in the United Kingdom;
(i) the Bank of England; or
(ii) the central bank of a member state of the OECD; or
(iii) a bank or a building society; or
(iv) a bank which is supervised by the central bank or other banking regulator of a member state of the OECD; or
(b) if the account is opened elsewhere:
(i) a bank in (a); or
(ii) a credit institution established in an EEA State other than in the United Kingdom and duly authorised by the relevant Home State Regulator; or
(iii) a bank which is regulated in the Isle of Man or the Channel Islands; or
(c) a bank supervised by the South African Reserve Bank; or
(d) any other bank that:
(i) is subject to regulation by a national banking regulator;
(ii) is required to provide audited accounts;
(iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time) and has a surplus revenue over expenditure for the last two financial years; and
(iv) has an annual audit report which is not materially qualified;
Associate: an associate in accordance with the FCA Handbook of Rules and Guidance;
Base Currency: the base currency of the Company is Pounds Sterling;
BCD Credit Institution: a credit institution under the Banking Consolidation Directive;
Class or Classes: in relation to Shares, means (according to the context) all of the Shares related to a single Sub-fund or a particular class or classes of Share related to a single Sub-fund;
Client Account: a bank account held by the ACD in accordance with the FCA Handbook of Rules and Guidance;
COLL: refers to the appropriate chapter or rule in the COLL Sourcebook issued by the FCA;
COLL Sourcebook: the Collective Investment Schemes Sourcebook issued by the FCA as amended or re-enacted from time to time;
Company: M&G Investment Funds (7);
Conversion: the exchange of Shares of one Class for Shares of another Class of the Sub-fund;
Dealing Day: Monday to Friday except for bank holidays in England and Wales and other days at the ACD’s discretion;
Depositary: National Westminster Bank plc, the depositary of the Company;
Efficient Portfolio Management: means the use of techniques and instruments which relate to transferable securities and approved money- market instruments and which fulfil the following criteria:
(a) they are economically appropriate in that they are realised in a cost effective way; and
(b) they are entered into for one or more of the following specific aims:
- reduction of risk;
- reduction of cost;
- generation of additional capital or income for the scheme with a risk level which is consistent with the risk profile of the scheme and the risk diversification rules laid down in COLL
Eligible Counterparty: a client that is either a per se eligible counterparty or an elective eligible counterparty as defined by the FCA Handbook of Rules and Guidance;
Eligible Institution: one of certain eligible institutions being a BCD credit institution authorised by its home state regulator or an Investment Firm authorised by its home state regulator as defined in the glossary of definitions in the FCA Handbook;
FCA: the Financial Conduct Authority;
Fraction: a smaller denomination Share (on the basis that one thousand smaller denomination Shares make one larger denomination Share);
Group Plan: one or more of The M&G ISA, The M&G Junior ISA, The M&G Savings Plan, and the M&G Securities International Nominee Service as the context may require;
Income Share: a Share in the Company in respect of which income allocated thereto is distributed periodically to the holders thereof pursuant to the Regulations;
Instrument of Incorporation: the instrument of incorporation of the Company as amended from time to time;
Intermediate Unitholder: a firm whose name is entered in the register of a Sub-fund, or which holds Shares indirectly through a third party acting as a nominee, and which:
(a) is not the beneficial owner of the relevant Share; and
(b) does not manage investments on behalf of the relevant beneficial owner of the Share; or
(c) does not act as a depositary of a collective investment scheme or on behalf of such a depositary in connection with its role in holding property subject to the scheme;
Investment Firm: an investment firm that provides investment services as defined in the glossary of definitions in the FCA handbook;
Investment Manager: M&G Investment Management Limited;
M&G Securities International Nominee Service: a group plan offered by the ACD designed to facilitate investment from outside the UK;
mainly: within an investment objective, an amount greater than 70%;
Member State: those countries which are members of the European Union or the European Economic Area at any given time;
Net Asset Value or NAV: the value of the Scheme Property of the Company (or of any Sub-fund as the context requires) less the liabilities of the Company (or of the Sub-fund concerned) as calculated in accordance with the Company’s Instrument of Incorporation;
predominantly: within an investment objective, at least 80% of the portfolio;
the Regulations: the Open-Ended Investment Companies Regulations 2001 and the rules contained in the COLL Sourcebook;
Scheme Property: the property of the Company to be given to the Depositary for safekeeping, as required by the Regulations;
Share or Shares: a share or shares in the Company (including larger denomination Shares and Fractions);
Shareholder: a holder of a registered Share in the Company;
Sub-fund: a Sub-fund of the Company (being part of the Scheme Property of the Company which is pooled separately) and to which specific assets and liabilities of the Company may be allocated and which is invested in accordance with the investment objective applicable to that Sub-fund;
Switch: the exchange of Shares of one Class or Sub-fund for Shares of another Class or Sub-fund of the Company;
The M&G ISA: an Individual Savings Account the manager of which is the ACD;
Definitions
M&G Investment Funds (7)
The M&G Junior ISA: a Junior Individual Savings Account the manager of which is the ACD;
The M&G Savings Plan: a group plan offered by the ACD designed to facilitate regular savings by Direct Debit in the UK;
Valuation Currency: the currency in which a Sub-fund is valued, being the currency noted for each Sub-fund in Appendices 1 and 4;
XD date: the XD (or Ex-Dividend) date is the date on which the income is removed from the price of an Income Share pending the payment of a distribution.
Operating Structure and Details
1 The Company
1.1 M&G Investment Funds (7) is an Open-Ended Investment Company with variable capital, incorporated in England and Wales under registered number IC000552 and authorised by the Financial Conduct Authority with effect from 29 June 2007. The Company has been established for unlimited duration.
1.2 The Company has been certified by the FCA complying with the conditions necessary for it to enjoy the rights conferred by the EC Directive on undertakings for collective investment in transferable securities (‘UCITS’).
1.3 The Head Office of the Company is at Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX and is also the address of the place in the United Kingdom for service on the Company of notices or other documents required or authorised to be served on it. The Company does not have any interest in immovable property or any tangible moveable property.
1.4 The Base Currency of the Company is Pounds Sterling.
1.5 The maximum share capital of the Company is currently
£250,000,000,000 and the minimum is £100. Shares in the Company have no par value and therefore the share capital of the Company at all times equals the Company’s current Net Asset Value.
1.6 The Company has been established as an ‘umbrella company’ (as defined in the Regulations) and therefore different Sub-funds may be formed by the ACD, subject to approval from the FCA. On the establishment of a new Sub-fund or Share Class an updated Prospectus will be prepared setting out the relevant information concerning the new Sub-fund or Share Class.
2 Company structure
2.1 The Company is an umbrella company within the meaning of the Regulations. The assets of each Sub-fund are treated as separate from those of every other Sub-fund and will be invested in accordance with that Sub-fund’s own investment objective and policy.
2.2 At present there are 5 Sub-funds in the Company: M&G European Strategic Value Fund
M&G Global Convertibles Fund M&G Global Emerging Markets Fund
M&G Global Floating Rate High Yield Fund M&G Pan European Dividend Fund
The Sub-funds are all UCITS schemes within the meaning of the Regulations.
2.3 The investment objective, investment policy and other details of the Sub-funds are set out in Appendices 1 and 4. The investment and borrowing powers under the COLL Sourcebook applicable to the Sub-funds are set out in Appendix 2 and the eligible markets on which the Sub-funds can invest are set out in Appendix 3.
2.4 When there is more than one Sub-fund in issue, each Sub-fund has a specific portfolio of assets and investments to which each Sub- fund’s assets and liabilities are attributable and investors should view each Sub-fund as a separate investment entity.
2.5 The Sub-funds are segregated portfolios of assets and, accordingly, the assets of a sub-fund belong exclusively to that sub-fund and shall not be made available to discharge (directly or indirectly) the liabilities of, or claims against, any other person or body, including the Company any other Sub-fund and shall not be available for any such purpose.
2.6 Shareholders in the Company are not liable for the debts of the Company or any Sub-fund in the Company. (see also section 42 - Risk Factors)
2.7 Subject to the above, each Sub-fund will be charged with the liabilities, expenses, costs and charges of the Company attributable to that Sub-fund and within the Sub-funds charges will be allocated between Share Classes in accordance with the terms of the issue of those Share Classes.
2.8 Any assets, liabilities, expenses, costs or charges not attributable to a particular Sub-fund may be allocated by the ACD in a manner which is fair to Shareholders as a whole but they will normally be allocated to all Sub-funds pro rata to the value of the net assets of the relevant Sub-funds.
3 Classes of Share within the Sub-fund
3.1 Several Share Classes may be issued in respect of the Sub-funds
The Share Classes in issue or available for issue are shown in Appendices 1 and 4.
Sterling Class N Shares are available only to a company which the ACD deems to be an Associate company or to other collective investment schemes managed by the ACD or a company which the ACD deems to be an Associate company.
The UK Government announced charges to tax law which removed the requirement to deduct tax on interest from UK Open-Ended Investment Companies with effect from April 2017. This change is expected to be enacted in the Finance Bill 2017. The Company has ceased to account for tax on net share classes for distributions after this date.
3.2 Any Sub-fund may make available such further Classes of Share as the ACD may decide.
3.3 Holders of Income Shares are entitled to be paid the income attributed to such Shares on the relevant interim and annual allocation dates net of tax, where appropriate. The price of such Shares immediately after the end of an accounting period reduces to reflect these allocations of income.
3.4 Holders of Accumulation Shares are not entitled to be paid the income attributable to such Shares but that income is automatically transferred to (and retained as part of) the capital assets of the relevant Sub-fund immediately after the relevant interim and / or annual accounting dates. The price of such Shares continues to reflect this retention of the income entitlement, which will be transferred after deduction of applicable tax, where appropriate.
3.5 Where a Sub-fund has different Classes of Share available, each Class may attract different charges and expenses and so monies may be deducted from Classes in unequal proportions. For this and like reasons, the proportionate interests of the Classes within a Sub-fund will vary from time to time.
3.6 Where there is more than one Sub-fund in the Company, Shareholders will be entitled (subject to certain restrictions) to switch all or some of their Shares in the Sub-fund for Shares in another Sub-fund (subject to certain restrictions). Details of the switching facility and the restrictions are set out in paragraph 15.1 of this document.
3.7 Holders of Income Shares may convert all or some of their Shares to Accumulation Shares of the same Class in the same Sub-fund, and holders of Accumulation Shares may convert all or some of their Shares to Income Shares of the same Class in the same Sub- fund. Details of this conversion facility are set out in paragraph 15.2 of this document.
3.8 Shareholders should note that the ACD issues hedged Share Classes. All costs associated with operating hedging transactions for the hedged Share Classes will be borne by Shareholders in those Share Classes. Share Class hedging activity does not form part of the investment strategy of the Sub-fund but is designed to reduce exchange rate fluctuations between either the currency of
the hedged Share Class and the material currency exposures within a Sub-fund’s portfolio, or the currency of the hedged Share Class and the Valuation Currency of the Sub-fund.
Forward currency contracts, or other instruments that may achieve a similar result, will be used to hedge the total return (capital and revenue) of the material currencies to which the portfolio is exposed.
The hedging position will be reviewed each day and adjusted when there is a material change, for example, to the dealing volume of Shares in hedged Share Classes and/or following asset allocation decisions by the Investment Manager.
3.9 Sterling Class R and Sterling Class R-H Shares are available only to Intermediate Unitholders or where the deal has been arranged by a financial adviser.
4 Management and administration
4.1 Authorised Corporate Director
4.1.1 The Authorised Corporate Director of the Company is M&G Securities Limited which is a private company limited by shares incorporated in England and Wales under the Companies Acts 1862 to 1900 on 12 November 1906. The ultimate holding company of the ACD is Prudential plc, a company incorporated in England and Wales. The FCA reference number for M&G Securities Limited is 122057.
4.1.2 Registered office and head office: Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, XX0X 0XX. Share capital:
Authorised £100,000 Issued and paid-up £100,000 Directors:
Mr Xxxx Xxxxxx,
Mr Xxxxxx XxxXxxxxx, Mr Xxxxxxxx Xxxxxxx, Mr Xxxxxx Xxxxx.
All of the directors have significant business activities which are not connected to those of the ACD but of other companies within the M&G Group.
4.1.3 The ACD is responsible for managing and administering the Company’s affairs in compliance with the Regulations. Other collective investment schemes for which the ACD has these responsibilities are set out in Appendix 5.
4.2 Terms of appointment
4.2.1 The ACD Agreement provides that the appointment of the ACD is for an initial period of three years and thereafter may be terminated upon 12 months written notice by either the ACD or the Company although in certain circumstances the agreement may be terminated forthwith by notice in writing by the ACD to the Company or the Depositary, or by the Depositary or the Company to the ACD. The ACD cannot be replaced until the FCA has approved the appointment of another director in place of the retiring ACD. The ACD Agreement may be inspected at the offices of the ACD during normal business hours by any Shareholder or any Shareholder’s duly authorised agent. Alternatively, a copy of the ACD Agreement may be sent to any Shareholder at his request within 10 days of the Company’s receipt of such request.
4.2.2 The ACD is entitled to its pro rata fees and expenses to the date of termination and any additional expenses necessarily realised in settling or realising any outstanding obligations. No compensation for loss of office is provided
for in the agreement. The ACD Agreement provides indemnities by the Company to the ACD other than for matters arising by reason of the ACD’s negligence, default, breach of duty or breach of trust in the performance of the ACD’s duties and obligations.
4.2.3 The ACD is under no obligation to account to the Depositary or the Shareholders for any profit it makes on the issue or re-issue of Shares or cancellation of Shares which it has redeemed. The fees to which the ACD is entitled are set out in section 28.
5 The Depositary
National Westminster Bank Plc is the Depositary of the Company.
The Depositary is incorporated in England as a public limited company. Its registered and head office is at 000 Xxxxxxxxxxx, Xxxxxx, XX0X 0XX. The ultimate holding company of the Depositary is the Royal Bank of Scotland Group plc, which is incorporated in Scotland. The principal business activity of the Depositary is banking.
5.1 Duties of the Depositary
The Depositary is responsible for the safekeeping of scheme property, monitoring the cash flows of the Sub-funds and must ensure that certain processes carried out by the ACD are performed in accordance with the applicable rules and scheme documents.
5.2 Conflicts of interest
The Depositary may act as the depositary of other open-ended investment companies and as trustee or custodian of other collective investment schemes.
It is possible that the Depositary and/or its delegates and sub- delegates may in the course of its or their business be involved in other financial and professional activities, which may on occasion have potential conflicts of interest with the Fund or a particular Sub- fund and/or other funds managed by the ACD, or other funds for which the Depositary acts as the depositary, trustee or custodian. The Depositary will, however, have regard in such event to its obligations under the Depositary Agreement and the Regulations and, in particular, will use reasonable endeavours to ensure that the performance of its duties will not be impaired by any such involvement it may have and that any conflicts which may arise will be resolved fairly and in the best interests of Shareholders collectively so far as practicable, having regard to its obligations to other clients.
Nevertheless, as the Depositary operates independently from the Company, Shareholders, the ACD and its associated suppliers and the Custodian, the Depositary does not anticipate any conflicts of interest with any of the aforementioned parties.
Up to date information regarding (i) the Depositary’s name, (ii) the description of its duties and any conflicts of interest that may arise between the Company, the Shareholders or the ACD and the Depositary, and (iii) the description of any safekeeping functions delegated by the Depositary, the description of any conflicts of interest that may arise from such delegation, and the list showing the identity of each delegate and sub-delegate, will be made available to Shareholders on request.
5.3 Delegation of Safekeeping Functions
The Depositary is permitted to delegate (and authorise its delegate to sub-delegate) the safekeeping of Scheme Property.
The Depositary has delegated safekeeping of the Scheme Property to State Street Bank and Trust Company (“the Custodian”). In turn, the Custodian has delegated the custody of assets in certain markets in which the Company may invest to various sub-delegates (“Sub-Custodians”). A list of Sub-Custodians is given in Appendix 7. Investors should note that the list of Sub-Custodians is updated only at each Prospectus review.
5.4 Updated Information
Up-to-date information regarding the Depositary, its duties, its conflicts of interest, and the delegation of its safekeeping functions will be made available to shareholders on request.
5.5 Terms of Appointment
The Depositary was appointed under a Depositary Agreement dated 18 March 2016 between the ACD, the Company and the Depositary (the “Depositary Agreement”).
5.5.1 Under the Depositary Agreement, the Depositary is free to render similar services to others, and the Depositary, the Company and the ACD are subject to a duty not to disclose confidential information.
5.5.2 The powers, duties, rights and obligations of the Depositary, the Company and the ACD under the Depositary Agreement shall, to the extent of any conflict, be overridden by the FCA Rules.
5.5.3 Under the Depositary Agreement, the Depositary will be liable to the Company for any loss of Financial Instruments held in Custody or for any liabilities incurred by the Company as a result of the Depositary’s negligent or intentional failure to fulfil its obligations.
However, the Depositary Agreement excludes the Depositary from any liability except in the case of fraud, wilful default, negligence or failure to exercise due care and diligence in the performance or non-performance of its obligations.
It also provides that the Company will indemnify the Depositary for any loss suffered in the performance or non- performance of its obligations except in the case of fraud, wilful default, negligence or failure to exercise due care and diligence on its part.
5.5.4 The Depositary Agreement may be terminated on 90 days’ notice by the Company or the Depositary or earlier on certain breaches or the insolvency of a party. However, termination of the Depositary Agreement will not take effect, nor may the Depositary retire voluntarily, until the appointment of a new Depositary.
5.5.5 Details of the fees payable to the Depositary are given under ‘Depositary’s Fee, Charges and Expenses’ in section 29.4.
5.5.6 The Depositary has appointed State Street Bank and Trust Company to assist the Depositary in performing its functions of custodian of the documents of title or documents evidencing title to the property of the Company. The relevant arrangements prohibit State Street Bank and Trust Company as such custodian from releasing the documents into the possession of a third party without the consent of the Depositary.
6 The Investment Manager
The ACD has appointed M&G Investment Management Limited (“MAGIM”) to provide investment management and advisory services in respect of the Sub-funds identified in Appendices 1 and
4. The Investment Manager has authority to make decisions on behalf of the Company and the ACD in respect of the acquisition and disposal of property at any time comprising the relevant Sub- fund and to advise in respect of the rights associated with the holding of such property. The Investment Manager has been appointed under an agreement between the ACD and the Investment Manager whereby the ACD accepts responsibility for all these services provided by the Investment Manager to the Company. The investment management agreement may be terminated on three months written notice by the Investment Manager or the ACD, or immediately by the ACD if it decides that it is in the best interests of Shareholders to do so.
The Investment Manager’s principal activity is acting as an investment manager and it is an Associate of the ACD by being a subsidiary of Prudential plc.
7 Administrator and Registrar
The ACD employs International Financial Data Services (UK) Limited (‘IFDS’) to provide certain administration services and act as registrar to the Company. The ACD also employs RBC Investor Services Bank S.A. to provide certain administration services for the M&G Securities International Nominee Service.
8 The Auditor
The auditor of the Company is Xxxxx & Young LLP, Atria One, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxx Xxxxxxx.
9 Register of Shareholders
The Register of Shareholders is maintained by IFDS at its office at XXXX Xxxxx, Xx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxx, XX00 0XX and may be inspected at that address during normal UK business hours by any Shareholder or any Shareholder’s duly authorised agent.
10 Fund Accounting, Pricing and the Operation of Hedged Share Classes
The ACD has appointed State Street Bank and Trust Company to undertake the fund accounting and pricing functions on behalf of the Company.
The ACD has appointed State Street Bank Europe Limited to undertake currency share class hedging functions.
11 Collateral Management
Where the Company enters into OTC derivative transactions, JPMorgan Chase Bank, N.A. will provide administrative services in connection with the collateral management functions.
12 Buying Shares and Selling Shares – General Information
12.1 On any given Dealing Day the ACD will be willing to sell Shares of at least one Class in each Sub-Fund.
12.2 The ACD has the right to reject, on reasonable grounds relating to the circumstances of the applicant, any application for Shares in whole or part, and in this event the ACD will return any money sent, or the balance of such monies, at the risk of the applicant. The ACD may also cancel any previously accepted request for the issue of Shares in the event of either non-payment of the amount due or undue delay in payment by the applicant, including the non- clearance of cheques or other documents presented in payment.
12.3 Any subscription monies remaining after a whole number of Shares has been issued may not be returned to the applicant. Instead, fractions may be issued in such circumstances. A fraction is equivalent to one thousandth of a larger denomination Share.
12.4 The minimum initial lump sum, subsequent lump sum and regular savings plan subscriptions for Shares and the minimum redemption and minimum holding amounts in the Sub-Funds are set out for each Sub-Fund in Appendices 1 and 4. At its discretion, the ACD may reject any request to buy Shares for less than the minimum initial lump sum or subsequent lump sum value (as appropriate). If at any time a Shareholder’s holding is below the specified holding minimum, the ACD reserves the right to sell the Shares and send the proceeds to the Shareholder, or at its absolute discretion convert the shares to another Share Class within the same Sub- Fund.
12.5 Please note that:
• Sterling Class C Shares are available only to a company which is an associate company or to other collective investment schemes managed by the ACD or a company which the ACD deems to be an associate company.
• Sterling Class R and R-H Shares are available only to Intermediate Unitholders or where the deal has been arranged by a financial adviser. Where a purchase by a Shareholder of Sterling Class R Shares has been arranged by a financial adviser the ACD will maintain a record of that financial adviser linked to their account with the ACD. If a Shareholder of Class R Shares has their financial adviser removed from their account (whether at the request of the Shareholder or the financial adviser, or as a result of the financial adviser no longer being authorised by the FCA), the ACD reserves the right at its absolute discretion to switch those Shares to Class A Shares within the same Sub-Fund. Shareholders should note that the ongoing charge of Class A Shares is greater than that of Class R Shares.
• Shares denominated in currencies other than Sterling can normally only be bought and sold via the M&G Securities International Nominee Service (see 14.2).
• Sterling Class I and I-H Shares, and Class C and Class C-H Shares denominated in currencies other than Sterling are available to:
- Eligible Counterparties, investing for their own account; and
- other collective investment schemes; and
- distributors, platforms and other forms of intermediary who operate fee based agreements with their clients to provide advisory or discretionary portfolio management services and do not receive any fee rebates from the ACD. For these clients, minimum subscription limits will not be applied.
- companies which the ACD deems to be associate companies of such companies and with other investors in accordance with the terms of their agreements with the ACD.
• Existing Shareholders in the Class C and I Shares, who held such Shares as at 12 January 2018 but no longer comply with the foregoing, can continue to hold such Shares and will be able to apply for additional subscriptions in Class C and I Shares which they hold. Changes to such arrangements will revert to the terms detailed above.
• Sterling Class E-H Shares will not be issued by the ACD unless the following two conditions are met in addition to any minimum investment amount specified in Appendix 1: the request to purchase Sterling Class E-H Shares must be received in writing by the ACD within six months of the relevant Sub-fund’s launch date, and the cumulative number of Sterling Class E-H Shares of the relevant Sub-Fund sold by the ACD has not exceeded 100,000,000 at the time the written request is received by the ACD. At its absolute discretion, the ACD may extend the period of time during whichSterling Class E-H Shares may be purchased, and may increase the total number of Sterling Class E-H Shares that may be purchased.
In order to obtain the current limits regarding the sale of Sterling Class E-H Shares, a potential investor should contact the ACD on 0000 000 000 (the Prospectus will not be immediately updated to reflect any increase to the period stated above or the amount of Sterling Class E-H Shares that may be sold stated above).
12.6 Shareholders have the right to sell Shares back to the ACD or require that the ACD arranges for the Company to buy their Shares on any Dealing Day unless the value of Shares which a Shareholder wishes to sell will mean that the Shareholder will hold Shares with a value less than the required minimum holding for the Sub-Fund concerned, in which case the Shareholder may be required to sell the entire holding.
12.7 Subject to the Shareholder maintaining the minimum holding stated in this Prospectus, part of a Shareholder’s holding may be sold but the ACD reserves the right to refuse a request to sell Shares if the value of the class of Shares of any Sub-Fund to be sold is less than the sum specified in Appendices 1 and 4.
13 Buying and selling Shares on the main register of Shareholders
13.1 Shares can be bought as a lump sum investment only. Investors wishing to make regular monthly contributions should invest via The M&G Savings Plan (please see 14.1 below).
13.3 Payment for Shares purchased by post must accompany the application. Payment for Shares purchased by other means must be made by no later than three business days, after the valuation point following receipt of the instructions to purchase.
13.4 Requests to sell Shares may be made by post, telephone, or any electronic or other means which the ACD may from time to time determine either directly or via an authorised intermediary; the ACD may require telephone or electronic requests to be confirmed in writing.
13.5 Requests to buy and sell Shares received before 12:00noon (UK time) on a Dealing Day will be executed at the price valid on that Dealing Day. Requests received after 12:00noon (UK time) will be executed using the price valid on the following Dealing Day.
13.6 Payment of proceeds will be made no more than three business days, after the later of:
• receipt by the ACD, when required, of sufficient written instructions duly signed by all the relevant Shareholders and completed as to the appropriate number of Shares, together with any other appropriate evidence of title; and
• the valuation point following receipt by the ACD of the request to sell.
13.7 The requirement for sufficient written sale instructions is normally waived for Shareholders of Sterling Classes of Shares if all the following conditions are met:
• Dealing instructions are given by the registered holder in person;
• The holding is registered in a sole name;
• The sale proceeds are to be made payable to the registered holder at their registered address, which has not changed within the previous 30 days; and
• The total amount payable in respect of sales by that holder on one business day does not exceed £20,000.
13.8 A contract note giving details of the Shares purchased or sold, and the price used will be sent to the Shareholder (the first named, in the case of joint Shareholders) or to an authorised agent, not later than the end of the business day following the valuation point by reference to which the price is determined. Where appropriate, this may be accompanied by a notice of the applicant’s right to cancel a purchase.
13.9 Currently share certificates will not be issued in respect of Shares. Ownership of Shares will be evidenced by an entry on the Company’s Register of Shareholders. Statements in respect of periodic allocations of income of each Sub-Fund will show the
number of Shares held by the recipient in the Sub-Fund in respect of which the allocation is made. Individual statements of a Shareholder’s Shares will also be issued at any time on request by the registered holder (or, when Shares are jointly held, the first named holder).
14 Buying and selling Shares via a Group Plan
14.1 The M&G Savings Plan, The M&G ISA, The M&G Junior ISA
14.1.1 The ACD offers The M&G Savings Plan, designed primarily to facilitate making regular savings by Direct Debit to a range of M&G Funds, and The M&G ISA and The M&G Junior ISA, designed to allow UK individuals to save tax efficiently in a range of M&G Funds. This is a summary of the buying and selling process of The M&G Savings Plan, The M&G ISA and The M&G Junior ISA. Please see our “Important Information for Investors” document for full information including the Terms & Conditions.
14.1.2 Shares can be bought as a lump sum investment or monthly by Direct Debit.
14.1.3 Postal applications may be made on application forms obtained from the ACD. The address for postal dealing is the same as in section 13.2. Alternatively, lump sum investments can be made under approved circumstances by telephoning M&G’s Customer Dealing Line (please see section 13.2).
14.1.4 Payment for Shares purchased must accompany the application.
14.1.5 Requests to sell Shares may be sent in writing to the address in section 13.2. Alternatively, requests to sell Shares can be made under approved circumstances by telephoning M&G’s Customer Dealing Line (please see section 13.2). Payment of proceeds will be made no more than three business days, after the valuation point following receipt by the ACD of the request to sell, provided we know the proceeds from all subscriptions, including Direct Debits, have cleared. We may delay paying the sale proceeds from any uncleared subscriptions, until we are satisfied that we have received all amounts which are due to us. Please note that Shares held in The M&G Junior ISA may not be sold without the permission of HMRC.
14.1.6 For lump sum investments, a contract note giving details of the Shares purchased and the price used will be issued by the end of the business day following the valuation point by reference to which the price is determined, together with, where appropriate, a notice of the applicant’s right to cancel. A contract note giving details of the Shares sold and the price used will be issued by the end of the business day following the valuation point by reference to which the price is determined.
14.1.7 Requests to buy and sell Shares received before 12:00 noon (UK time) on a Dealing Day will be executed at the price valid on that Dealing Day. Requests received after 12:00 noon (UK time) will be executed using the price valid on the following Dealing Day.
14.1.8 Investors’ share ownership will be evidenced by an entry in the name of M&G Nominees Limited, Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, XX0X 0XX on the Company’s register of shareholders.
14.1.9 Statements will be issued twice each year. A summary of transactions will also be issued at any time on request by the holder.
14.2 The M&G Securities International Nominees Service
14.2.1 The ACD offers a nominee service (the “M&G Securities International Nominee Service”) primarily designed to facilitate the buying and selling of non-sterling denominated Share Classes (though in certain
circumstances, the ACD may also permit Xxxxxxxx denominated Share Classes to be bought and sold via this service). This is a summary of the buying and selling process of the M&G Securities International Nominee Service. Please see the Terms & Conditions of the M&G Securities International Nominee Service or your agreement with the ACD, and Appendix 4A (where appropriate) for more information.
14.2.2 Investors who wish to use the M&G Securities International Nominee Service for the first time should complete and sign the application form (available from the ACD) and mail it to “ RBC I&TS, RE: M&G Securities Limited, 00 Xxxxx xx Xxxxxx, X-0000 Xxxx-xxx-Xxxxxxx, Xxxxxxxxxx”. The completed forms must be received before 9.30am CET on a Dealing Day in order for the investment account to be opened and the buying order to be executed at the share price valid on that day.
14.2.3 Subsequent purchase instruction can be sent directly to the ACD by fax (on x000 0000 0000) or post (at the address in section 14.2.2). Any such purchase instruction should state the investor’s account number (which is stated on each contract note), the name of the investor, the name of the Sub-Fund into which the amount is to be invested and the respective share class (ISIN Code). In the absence of such instructions, it will not be possible to process the purchase order and the money will be returned without interest and at the expense of the sender. The minimum amount for a subsequent investment per Sub-Fund and share class is disclosed in Appendices 1 and 4.
14.2.4 Subsequent purchase instructions, or requests to redeem Shares must be received before 11:30am CET on a Dealing Day in order for the buying or selling order to be executed at the share price valid on that Dealing Day. Requests received after 11:30am CET will be executed using the share price valid on the following Dealing Day.
14.2.5 Payment for Xxxxxx purchased must be made by no later than three business days after the valuation point at which the buying order is executed.
14.2.6 Redemption proceeds will be paid to investors by bank transfer by the settlement date quoted on the contract note. This should be no more than three business days, after the valuation point at which the selling order is executed.
14.2.7 Investors should take into account that the processing time needed by banks involved in such transfer may differ and that it can therefore not be guaranteed that the redemption proceeds will be credited to the investor’s bank account within the aforementioned.
14.2.8 Investors’ share ownership will be evidenced by an entry in the name of M&G International Investments Nominees Limited, Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX on the Company’s register of shareholders. This service is available to shareholders free of charge.
15 Switching between Sub-funds and converting Shares
15.1 Switching
15.1.1 Holders of Shares in a Sub-fund may at any time switch all or some of their Shares in one Sub-fund (‘Original Shares’) for Shares of another Sub-fund (‘New Shares’), provided they are eligible to hold Shares in that Class or Sub-fund and are in the same currency. The number of New Shares issued will be determined by reference to the respective prices of New Shares and Original Shares at the valuation point applicable at the time of Original Share are the redeemed and the New Shares are issued.
15.1.2 Switching may be effected by giving instructions to the ACD and the Shareholder may be required to provide sufficient written instructions (which, if required - see paragraph 14.2.1 - in the case of joint Shareholders must be signed by all the joint holders).
15.1.3 The ACD may at its discretion charge a fee on the switching of Shares between Sub-funds (see paragraph 16.3). Where a fee is charged it will not exceed the aggregate of the relevant redemption and initial charges in respect of the Original Shares and the New Shares.
15.1.4 If the switch would result in the Shareholder holding a number of Original Shares or New Shares of a value which is less than the minimum holding in the Sub-fund concerned the ACD may, if it thinks fit, switch the whole of the applicant’s holding of Original Shares to New Shares or refuse to effect any switch of the Original Shares. No switches will be effected during any period when the right of Shareholders to require the redemption of their Shares is suspended. The general provision on procedures relating to redemption will apply equally to a switch. Switch instructions must be received by the ACD before the valuation point on a Dealing Day in the Sub-fund or Sub- funds concerned to be dealt with at the prices at those valuation points on that Dealing Day, or at such other date as may be approved by the ACD. Switch requests received after a valuation point will be held over until the valuation point in the next Dealing Day in the relevant Sub-fund or Sub-funds.
15.1.5 The ACD may adjust the number of New Shares to be issued to reflect the imposition of any switching fee together with any other charges or levies in respect of the issue or sale of the New Shares or repurchase or cancellation of the Original Shares as may be permitted pursuant to the Regulations.
15.1.6 Please note that a switch of Shares in one Sub-fund for Shares in any other Sub-fund is treated as a redemption and sale and will, for persons subject to UK taxation, be a realisation for the purposes of capital gains taxation.
15.1.7 A Shareholder who switches Shares in one Sub-fund for Shares in any other Sub-fund has no right by law to withdraw from or cancel the transaction.
15.1.8 Terms and current charges for the switching of Shares of any Class of any Sub-fund may be obtained from the ACD.
15.2 Conversions
15.2.1 Conversions of Income Shares to Accumulation Shares and of Accumulation Shares to Income Shares of the same Class in the same Sub-fund are undertaken by reference to the respective Share prices. For persons subject to UK taxation, this will not be a realisation for the purposes of capital gains taxation.
15.2.2 Where a Sub-fund issues multiple Share Classes, a Shareholder may only convert Shares of one Class for Shares in another Class where they are eligible to hold the other Class. Requests to convert between Share Classes must be submitted using the appropriate form available from the ACD. Such conversions will be executed within three Dealing Days of receipt of a valid instruction. Requests to convert between Share Classes are undertaken by reference to the respective Share prices of each Class. For interest distributing funds, whose prices are currently calculated net of income tax in accordance with applicable tax law, these prices will be “net” prices. The impact of using net prices where the conversion of Shares is to a Class with a lower ACD’s annual remuneration (see Appendix 1) is that the Sub-fund ‘s total tax charge will increase and this increase will be borne by all Shareholders in the receiving Share Class. This
approach has been agreed with the Depositary subject to the total impact to Shareholders being immaterial. Where the ACD determines at its absolute discretion that Share Class conversions are materially prejudicial to the Shareholders of a Share Class, instructions to convert between Share Classes will only be executed on the Dealing Day following the relevant Sub-fund’s XD date. In such circumstances, instructions to convert between Share Classes must be received by the ACD no sooner than ten business days before the Sub-fund’s relevant XD date.
15.2.3 Please note that conversions may be subject to a fee. The fee will not exceed an amount equal to the aggregate of the then prevailing redemption charge (if any) in respect of Original Shares and the initial charge (if any) in respect of New Shares and is payable to the ACD.
16 Dealing charges
16.1 Initial charge
The ACD may impose a charge on the buying of Shares. This charge is a percentage of the total amount of your investment and is deducted from your investment before Shares are purchased. The current level in relation to each Sub-fund is set out in Appendices 1 and 4 and is subject to discounts that the ACD at its absolute discretion may apply from time to time. Increases from the current rates of charge can only be made in accordance with the COLL Sourcebook and after the ACD has revised the Prospectus to reflect the increased rate.
16.2 Redemption charge
16.2.1 The ACD may make a charge on the cancellation and redemption (including transfer) of Shares. Other Shares issued and bought, and persons known to the ACD to have made arrangements for the regular purchase of other Shares while this Prospectus is in force, will not be subject to any redemption charge introduced in the future in respect of those Shares. Currently, those Shares deemed to carry a redemption charge will carry a reducing redemption charge calculated in accordance with the table below. With Accumulation Shares, where any income is reinvested back into the share price, the valuation when calculating a redemption will include the capital increment associated with this reinvested income. In relation to the imposition of a redemption charge as set out above, where Shares of the Class in question have been purchased at different times by a redeeming Shareholder, the Shares to be redeemed shall be deemed to be the Shares which incur the least cost to the Shareholder and thereafter the Shares purchased first in time by that Shareholder.
Redemption charge table
The deduction from the mid value for redemption before the following anniversaries on the Sterling Class X Income and Accumulation Shares would be:
1st year 4.5%
2nd year 4.0%
3rd year 3.0%
4th year 2.0%
5th year 1.0%
Thereafter Nil
16.2.2 The ACD may not introduce or increase a redemption charge on Shares unless:
16.2.2.1 the ACD has complied with the Regulations in relation to that introduction or change; and
16.2.2.2 the ACD has revised the Prospectus to reflect the introduction or change and the date of its commencement and has made the revised Prospectus available.
16.2.3 In the event of a change to the rate or method of calculation of a redemption charge, details of the previous rate or method of calculation will be available from the ACD.
16.3 Switching fee
On the switch of Shares of a Sub-fund for Shares of another Class or another Sub-fund, the Instrument of Incorporation authorises the Company to impose a switching fee at the discretion of the ACD. The fee will not exceed an amount equal to the aggregate of the then prevailing redemption charge (if any) in respect of Original Shares and the initial charge (if any) in respect of New Shares and is payable to the ACD.
There is currently no fee payable on a switch between Classes of Shares of a Sub-fund unless the Classes are issued in a different currency or have a different charging structure.
17 Other dealing information
17.1 Dilution
17.1.1 The basis on which each Sub-fund’s investments are valued for the purpose of calculating the price of Shares as stipulated in the Regulations and the Company’s Instrument of Incorporation is summarised in section 24. However, the actual cost of purchasing or selling investments for each Sub-fund may deviate from the mid- market value used in calculating the price of Shares in each Sub-fund due to dealing costs such as broking charges, taxes, and any spread between the buying and selling prices of the underlying investments. These dealing costs can have an adverse effect on the value of a Sub- fund, known as “dilution”. It is not, however, possible to predict accurately whether dilution will occur at any point in time. The Regulations allow the cost of dilution to be met directly from a Sub-fund’s assets or to be recovered from investors on the purchase or redemption of Shares in each Sub-fund inter alia by means of a dilution adjustment to the dealing price, and this is the policy which has been adopted by the ACD. The ACD shall comply with COLL 6.3.8 in its application of any such dilution adjustment. The ACD’s policy is designed to minimise the impact of dilution on any Sub-fund.
17.1.2 The dilution adjustment for each Sub-fund will be calculated by reference to the estimated costs of dealing in the underlying investments of that Sub-fund, including any dealing spreads, commissions and transfer taxes. The need to apply a dilution adjustment will depend on the relative volume of sales (where they are issued) to redemptions (where they are cancelled) of Shares. The ACD may apply a dilution adjustment on the issue and redemption of such Shares if, in its opinion, the existing Shareholders (for sales) or remaining Shareholders (for redemptions) might be adversely affected, and if in applying a dilution adjustment, so far as practicable, it is fair to all Shareholders and potential Shareholders. In specie transfers will not be taken into account when determining any dilution adjustment and any incoming portfolio will be valued on the same basis as each Sub-fund is priced (i.e. offer plus notional dealing charges, mid, or bid less notional dealing charges). When a dilution adjustment is not applied there may be a dilution of the assets of a Sub-fund which may constrain the future growth of that Sub-fund.
17.1.3 The ACD may alter its current dilution adjustment policy by giving Shareholders at least 60 days’ notice and amending the Prospectus before the change takes effect.
17.1.4 Based on experience, the ACD would typically expect to make a dilution adjustment on most days, and this is expected to be of the magnitude shown in the table below. The ACD reserves the right to adjust the price by a lesser amount but will always make such an adjustment in a fair manner solely to reduce dilution and not for the purpose of creating a profit or avoiding a loss for the account of the ACD or an Associate. It should be noted that as dilution is related to inflows and outflows of monies and the purchase and sale of investments it is not possible to predict accurately if and when dilution will occur and to what extent.
Typical dilution adjustments for the Sub-funds are expected to be:
M&G European Strategic Value Fund +0.30% /-0.09% M&G Global Convertibles Fund +0.28% /-0.28% M&G Global Emerging Markets Fund +0.29% /-0.34%
M&G Global Floating Rate High Yield Fund +0.24% /-0.24%
M&G Pan European Dividend Fund +0.27% /-0.08%
Positive dilution adjustment figures indicate a typical increase from mid price when a Sub-fund is experiencing net issues. Negative dilution adjustment figures indicate a typical decrease from mid price when the Sub-fund is experiencing net redemptions.
Except for M&G Global Floating Rate High Yield Fund, figures are based on the historic costs of dealing in the underlying investments of the Sub-fund for the twelve months to 30 November 2017, including any spreads, commissions and transfer taxes.
Figures for M&G Global Floating Rate High Yield Fund are based upon the ACD’s best estimations.
17.2 In specie issues and redemptions
At its absolute discretion the ACD may agree or determine that instead of payment in cash to, or from, the Shareholder for Shares in a Sub-fund, the settlement of an issue or redemption transaction may be effected by the transfer of property into or out of the assets of the company on such terms as the ACD shall decide in consultation with the Investment Manager and the Depositary. In the case of redemptions, the ACD shall give notice to the Shareholder prior to the redemption proceeds becoming payable of its intention to transfer property to the Shareholder and, if required by the Shareholder, may agree to transfer to the Shareholder the net proceeds of the sale of such property.
The ACD may also offer to sell an investor’s property and invest the proceeds by purchasing Shares in a Sub-fund, subject to detailed terms and conditions available upon request.
17.3 Client account
Cash may be held for you in a client account in certain circumstances. Interest is not paid on any such balances.
17.4 Excessive Trading
17.4.1 The ACD generally encourages Shareholders to invest in Sub-funds as part of a medium to long-term investment strategy and discourages excessive, short term, or abusive trading practices. Such activities may have a detrimental effect on the Sub-funds and other Shareholders. The ACD has several powers to help ensure that Shareholder interests are protected from such practices. These include:
17.4.1.1 Refusing an application for Shares (see paragraph 13.1.3);
17.4.1.2 Fair Value Pricing (see section 24); and
17.4.1.3 Applying the Dilution Adjustment (see paragraph 17.1).
17.4.2 We monitor shareholder dealing activity and if we identify any behaviour that, in our view, constitutes inappropriate or excessive trading, we may take any of the following steps with the shareholders we believe are responsible:
17.4.2.1 Issue warnings which if ignored may lead to further applications for Xxxxxx being refused;
17.4.2.2 Restrict methods of dealing available to particular Shareholders; and/or
17.4.2.3 Impose a switching fee (see paragraph 16.3).
17.4.3 We may take these steps at any time, without any obligation to provide prior notice and without any liability for any consequence that may arise.
17.4.4 Inappropriate or excessive trading can sometimes be difficult to detect particularly where transactions are placed via a nominee account. The ACD therefore cannot guarantee that its efforts will be successful in eliminating such activities and their detrimental effects.
17.5 ACD dealing as principal
Where the ACD deals as principal in the Shares of a Sub-fund, any profits or losses arising from such transactions shall accrue to the ACD and not to the relevant Sub-fund of the Company. The ACD is under no obligation to account to the Depositary, or to Shareholders for any profit it makes on the issue or re-issue of Shares or cancellation of Shares which it has redeemed.
18 Money laundering
As a result of legislation in force in the United Kingdom to prevent money laundering, firms conducting investment business are responsible for compliance with money laundering regulations. The ACD may verify your identity electronically when you undertake certain transactions. In certain circumstances investors may be asked to provide proof of identity when buying or selling Shares. Normally this will not result in any delay in carrying out instructions but, should the ACD request additional information, this may mean that instructions will not be carried out until the information is received. In these circumstances, the ACD may refuse to sell or, redeem Shares, release the proceeds of redemption or carry out such instructions.
19 Restrictions on dealing
The ACD may from time to time impose such restrictions as it may think necessary for the purpose of ensuring that no Shares are acquired or held by any person in breach of the law or governmental regulation (or any interpretation of a law or regulation by a competent authority) of any country or territory. In this connection, the ACD may, inter alia, reject in its discretion any application for the issue, sale, redemption, cancellation or switch of Shares or require the mandatory redemption of Shares or transfer of Shares to a person qualified to hold them.
The distribution of this Prospectus and the offering of Shares in or to persons resident in or nationals of or citizens of jurisdictions outside the UK or who are nominees of, custodians or trustees for, citizens or nationals of other countries may be affected by the laws of the relevant jurisdictions. Such Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any Shareholder to satisfy himself as to the full observance of the laws and regulatory requirements of the relevant jurisdiction, including obtaining any governmental, exchange control or other consents which may be required, or compliance with other necessary formalities needing to be observed and payment of any issue, transfer or other taxes or duties due in such jurisdiction. Any such Shareholder will be responsible for any such issue, transfer or other taxes or payments by whomsoever payable and the Company (and any person acting on behalf of it) shall be fully indemnified and held harmless by such
Shareholder for any such issue, transfer or other taxes or duties as the Company (and any person acting on behalf of it) may be required to pay.
If it comes to the notice of the ACD that any Shares (“affected Shares”) are owned directly or beneficially in breach of any law or governmental regulation (or any interpretation of a law or regulation by a competent authority) of any country or territory, which would (or would if other Shares were acquired or held in like circumstances) result in the Company incurring any liability to taxation which the Company would not be able to recoup itself or suffering any other adverse consequence (including a requirement to register under any securities or investment or similar laws or governmental regulations of any country or territory) or by virtue of which the Shareholder or Shareholders in question is/are not qualified to hold such Shares or if it reasonably believes this to be the case, the ACD may give notice to the Shareholder(s) of the affected Shares requiring the transfer of such Shares to a person who is qualified or entitled to own them or that a request in writing be given for the redemption of such Shares. If any Shareholder upon whom such a notice is served does not within thirty days after the date of such notice transfer their affected Shares to a person qualified to own them or submit a written request for their redemption to the ACD or establish to the satisfaction of the ACD (whose judgement is final and binding) that they or the beneficial owner are qualified and entitled to own the affected Shares, they shall be deemed upon the expiration of that thirty day period to have given a request in writing for the redemption or cancellation (at the discretion of the ACD) of all the affected Shares pursuant to the Regulations.
A Shareholder who becomes aware that they are holding or own affected Shares shall forthwith, unless they have already received a notice as aforesaid, either transfer all their affected Shares to a person qualified to own them or submit a request in writing to the ACD for the redemption of all their affected Shares.
Where a request in writing is given or deemed to be given for the redemption of affected Shares, such redemption will be effected in the same manner as provided for under the Regulations, if effected at all.
20 Suspension of dealings in the Company
20.1 The ACD may with the agreement of the Depositary, or must if the Depositary so requires temporarily suspend for a period the issue, sale, cancellation and redemption of Shares or any Class of Shares in a Sub-fund if the ACD or the Depositary is of the opinion that due to exceptional circumstances there is good and sufficient reason to do so having regard to the interests of Shareholders.
20.2 The ACD will notify Shareholders as soon as is practicable after the commencement of the suspension, including details of the exceptional circumstances which have led to the suspension, in a clear, fair and not misleading way and giving Shareholders details of how to find further information about the suspensions..
20.3 Where such suspension takes place, the ACD will publish, on its website or other general means, sufficient details to keep Shareholders appropriately informed about the suspension, including, if known, its possible duration.
20.4 During the suspension none of the obligations in COLL 6.2 (Dealing) will apply but the ACD will comply with as much of COLL
6.3 (Valuation and Pricing) during the period of suspension as is practicable in light of the suspension.
20.5 Re-calculation of the Share price for the purpose of sales and purchases will commence at the time the suspension is ended or at the next relevant valuation point following the ending of the suspension.
20.6 The exceptional circumstances in which the ACD or the Depositary may require the temporary suspension of the issue, sale, cancellation and redemption of Shares, or any class of Shares in any or all the Sub-funds includes, but is not limited to the following: