Changes to investment policy - M&G (Lux) Optimal Income Fund
M&G Investments has notified us of upcoming changes to the investment policy of the M&G (Lux) Optimal Income Fund (the “Fund”) to take effect in September and October 2025.
The Fund features in our defined fund ranges shown opposite in the following share class and currencies:-
- M&G (Lux) Optimal Income A Acc CHF Hgd
- M&G (Lux) Optimal Income A Acc EUR
- M&G (Lux) Optimal Income A Acc USD Hgd
1. Clarity of the investment limits applied to the Fund
Effective from 17 September 2025 (the “Effective Date”), M&G are making changes to the Fund's investment policy aimed at improving the transparency and clarity of the investment limits which are applied to the Fund. These changes are being made to ensure that the disclosures in the Prospectus are aligned with the descriptions of the investment policy provided to investors in non-EU countries where the Fund is marketed.
New wording being added to the investment policy as from the Effective Date
The limit detailed in the table below already applies to the Fund but has not been expressly stated in the investment policy in the Fund's Prospectus. It is therefore being added for greater clarity.
| The new wording is shown underlined |
|---|
| The Fund may invest up to 10% of its Net Asset Value in Chinese onshore debt securities denominated in CNY traded on the China Interbank Bond Market. |
2. Amendment to include distressed debt securities and defaulted debt securities
Effective from 20 October 2025, M&G will be amending the Fund's investment policy to specify that it can hold up to 10% of its Net Asset Value (“NAV”) in distressed debt securities and defaulted debt securities. As a result of the above change, the Fund may be subject to Distressed and defaulted debt securities risk and the ‘Main Risks’ section of the Fund's Supplement will be amended accordingly.
In addition to the amendment to the Fund's investment policy, M&G will also add a ‘Downgrade policy’ to the Fund’s Investment Approach section within its Fund Supplement to clarify what action the Investment Manager may take in the event of a credit rating downgrade to a security or an issuer held by the Fund.
| Downgrade policy |
|---|
| In the event that a debt security’s or an issuer’s credit rating is downgraded, the credit standing will be assessed as soon as possible and appropriate actions for any specific relevant instrument within the Fund may be taken. These actions could include selling the underlying holdings or retaining the holdings to maturity depending on the specific characteristics of the instrument; in either event, the decision will be based on what is in the best interest of the Shareholders of the Fund. |
Why are the changes happening?
The changes will provide increased investment flexibility to the Fund. The changes will also provide more transparency for investors by providing additional details on what the Fund is able to invest in, and within what limits.
Impact of the changes
There will be no change to the Fund's investment objective and investment strategy, and where applicable, its classification under the Sustainable Finance Disclosure Regulation (“SFDR”) will remain unchanged. There will be no material change to the Fund's overall liquidity and risk profiles. The above changes will not result in any changes to the Fund's portfolio.
Impacted policyholders do not need to do anything if they are happy with the above changes.
For more information on M&G funds, visit the M&G Investments website.