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M & G Strategic Corporate Bond Class X Accumulation

Sell : 71.74p | Buy : 71.74p | down 0.08p
Last valuation as at 06-11-2009

Also available as income units

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Overview

Initial charge 0.00%
Initial saving 0.00%
Annual charge 1.25%
Annual saving 0.125% ²
Total Expense Ratio 1.41%
Launch date 20-02-2004
Launch price £0.50
Sector GBP Corporate Bond
Fund size £1,788 million
Number of holdings 580
Fund type OEIC
Type of units Accumulation
Performance charges No
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HL Research - Our view on this Fund

Mark Dampier Corporate bond investing is mainly about credit risk. There is no point investing in a bond producing 10% income if the firm is going bust. However when you can get a 5% or 6% yield from quality companies corporate bonds represent value. Today is such an opportunity.

There are currently two reasons to buy corporate bonds. Institutions have unceremoniously dumped corporate bonds. This has driven prices down below the level you would expect with interest rates so low. Fear of corporate failure has put further pressure on prices.

To outline this situation the average AAA bond (the most securely rated types of bonds) is currently trading at 93p. Buyers at these prices are receiving a high fixed yield of around 5.1% and when ‘normality' returns to the market, prices are also likely to appreciate, giving some capital growth. However it should be noted that all corporate bonds can fall in value as well as rise so you could get back less than you invested.

That's why to spread risk we suggest investors consider an actively managed fund such as M&G Strategic Corporate Bond, where the underlying bonds are bought and sold on their relative merits considering interest rates and credit ratings. M&G are favourably positioned to run bond funds, not least because they have always specialised in income yielding investments. They also have their own credit rating department. When you add this to the manager Richard Woolnough's track record, experience and the positioning of the fund in the sweet spot of the corporate bond market here is an opportunity to benefit from a good yield (completely tax free within an ISA or SIPP) with some potential for capital appreciation. For investors seeking yield either to withdraw or roll up the M&G Strategic Corporate Bond Fund is a serious consideration.

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About the Fund Manager

Photo of Richard Woolnough

Richard Woolnough
Located in: London


Richard joined M&G in January 2004 and is a fund manager on the fixed interest desk. On leaving university he joined Lloyds merchant bank as a trainee gilt salesman. Following the 'big bang' he moved on to join Prudential-Bache securities as a gilt salesman. Richard then moved across to the fund management arena in 1987, he joined Assicurazioni Generali, Italy's largest insurance company, as a manager of equities and Sterling bonds. In 1993 he joined S.G. Warburg as a member of their sterling bond trading team. Richard moved to join Old Mutual in 1995, where he ran a Sterling based annuity portfolio. He was instrumental in the planning, launch, and for the running of the successful Old Mutual Corporate Bond fund. Richard gained a degree in economics from the London School of Economics between 1982 and 1985.

 
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Income details

Distribution yield 4.00%
Underlying yield 4.00%
Income paid Quarterly
Type of payment Interest
Yield calculation basis Effective
Charges deducted from Income

All yields are variable and not guaranteed. The information is correct as at 31-10-2009.

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Distribution dates

Ex-dividend date 01 March 2009
Payment date ³ 30 April 2009
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Help - Top 10

Top 10 holdings

INBEV 1.21%
NETWORK RAIL INFRA 0.97%
NETWORK RAIL 0.88%
VODAFONE GROUP PLC 0.86%
AT T INC 0.85%
ELECTRICITE DE FRANCE 0.85%
ROCHE HOLDINGS INC 0.83%
RWE FINANCE BV 0.80%
BG ENERGY CAPITAL 0.79%
REED ELSEVIER 0.75%

Top 10 sectors

Bonds 94.62%
Cash and Equiv. 4.50%
Non-Classified 0.88%

Top 10 countries

United Kingdom 45.39%
United States 13.77%
Netherlands 7.70%
France 6.72%
Cash and Equiv. 4.50%
Non-Classified 3.14%
Luxembourg 2.43%
Belgium 2.20%
Germany 2.17%
Australia 2.08%

² Annual saving is not available in the SIPP.

³ If you elect to receive the income from a Vantage ISA, Fund or Share Account, we will collect any dividends for you and then pay them directly into your bank account within the first 10 working days of the following month.

Last valuation as at 06-11-2009. Data accurate as at 30/09/2009.

Data provided by
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