Fund Awards 2008
WINNER
PORTFOLIO ADVISER FUND AWARDS 2008 CATEGORY WINNER
M&G Strategic Corporate Bond Fund
Richard Woolnough joined
M&G in January 2004 to take
on the Strategic Corporate
Bond Fund, which was
launched the following month,
after having previously run
the Old Mutual Corporate
Bond Fund.
The £150m M&G fund
invests predominantly in
sterling-denominated investment
grade corporate bonds
– accounting for at least
80% of its exposure – but
may also invest in other debt
instruments, including higher
yielding corporate bonds,
government debt and convert-
Annual discrete performance
%
4
2
0
-2
-4
M&G Strategic Corp Bond
Source: Morningstar
Corporate bonds
Quartile performance: 1 Jul ’05 – 1 Jul ’08
1st q’tile
2nd q’tile
3rd q’tile
4th q’tile
Q3
’05
Q4
’05
Source: Morningstar
Q1
’06
Q2
’06
Q3
’06
M&G Strategic Corporate Bond vs index
%
8
6
4
2
0
-2
-4
-6
Jul ’05 Jan ’06
Source: Morningstar
ible and preference stocks, as
well as money market instru-
Q4
’06
Fund facts
Year ending Jun ’06
Year ending Jun ’07
Year ending Jun ’08
M’star UK Fixed Income £ Corporate
M&G Strategic Corp Bond
Jul
M’star UK FI £ Corporate
Fund name: M&G Strategic Corporate Bond Manager: Richard Woolnough
Launch date: 20 Feb ’04 Fund size: £192.96m Initial charge: 3%
Annual charge: 1% Min initial investment: £500 M’star rating: ����
Q1
’07
Q2
’07
Q3
’07
Q4
’07
Q1
’08
Q2
’08
DECEMBER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER SUPPLEMENT
Jan ’07
Jul
ments and equities.
The fund’s current allocation
is 60% in AAA to Arated
bonds, 30% in BBB to
B-rated bonds, 5% in nonrated
bonds and the balance
(5%) in cash.
Woolnough runs the fund
on a fairly concentrated basis
of between 60 and 80 credits,
with particular attention paid
to default risk.
He is of the opinion that
when investing in credit, superior
performance is gained by
avoiding the losers rather than
picking the winners.
Just over a quarter of the
fund (27%) has a duration of
between seven and ten years,
with a further 32% having a
duration of between ten and
20 years.
At present, Woolnough
holds 30% of the fund in his
top ten holdings; of these, the
largest holding is in UK government
bonds (8.3%).
Jan ’08
Jul
M&G’s Richard Woolnough
“
The M&G team has
shown it will back its
convictions by taking
significant benchmark
risk. This is reflected in
superior performance
in what have been the
most difficult market
conditions
”
David Coombs, PA Fund
Awards judge
15
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