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M&G Investment Funds

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M&G Investment Funds M&G Investment Funds (3) Interim Long Report and unaudited Financial Statements for the six months ended 31 December 2020 Contents Authorised Corporate Director’s Report .......... 1 Directors’ statement .......................... 4 Financial statements and notes.................. 5 Authorised Corporate Director’s Reports, including the financial highlights and financial statements and notes for: M&G Corporate Bond Fund .................... 6 M&G Dividend Fund .......................... 38 M&G Emerging Markets Bond Fund............. 61 M&G European Corporate Bond Fund ........... 87 M&G Global Government Bond Fund............ 112 M&G Recovery Fund .......................... 135 M&G Smaller Companies Fund ................. 159 Other regulatory disclosures .................... 178 Glossary ..................................... 179 M&G Investment Funds (3) Interim Long Report and unaudited Financial Statements • December 2020 Authorised Corporate Director’s Report The Authorised Corporate Director (ACD) of M&G A shareholder is not liable for the debts of the Company Investment Funds (3) presents its Interim Long Report and will never be liable to make any further payment to and unaudited Financial Statements for the six months the Company after paying the purchase price of the ended 31 December 2020. shares. The unaudited financial statements of Fund managers M&G Investment Funds (3) and the investment report The following fund managers are employed by M&G FA and unaudited financial statements and notes of each Limited which is an associate of M&G Securities sub-fund are presented in their individual sections of Limited. this report as set out in the contents page. M&G Corporate Bond Fund Please note that we have included an explanation of key Richard Woolnough & Ben Lord investment terminology in the ‘Glossary’ (at the back of this report). M&G Dividend Fund Michael Stiasny Company information M&G Emerging Markets Bond Fund Claudia Calich M&G Investment Funds (3) is an umbrella Open-Ended Investment Company (OEIC) and contains seven sub- M&G European Corporate Bond Fund funds, hereinafter referred to as ‘funds’ in the rest of Stefan Isaacs this report. Each fund is a UCITS (Undertakings for M&G Global Government Bond Fund Collective Investment in Transferable Securities) Claudia Calich scheme as defined in the Collective Investment Please note that effective from 4 January 2021, Eva Sun-Wai replaced Schemes sourcebook, as issued (and amended) by the Claudia Calich as fund manager. Financial Conduct Authority (FCA). This OEIC is an M&G Recovery Fund Investment Company with Variable Capital (ICVC) Tom Dobell incorporated under the Open-Ended Investment Please note that effective from 31 December 2020, Michael Stiasny Companies Regulations 2001. It is authorised and replaced Tom Dobell as fund manager. regulated by the FCA under the Financial Services and M&G Smaller Companies Fund Markets Act 2000. Garfield Kiff The Company was authorised on 8 August 2001 and was launched on 7 March 2002, following the ACD conversion of a series of authorised unit trusts. M&G Securities Limited, 10 Fenchurch Avenue, London EC3M 5AG, UK The Company’s principal activity is to carry on business Telephone: 0800 390 390 (UK only) as an OEIC. The Company is structured as an umbrella company, and different funds may be established by (Authorised and regulated by the Financial Conduct the ACD from time to time with the agreement of the Authority. M&G Securities Limited is a member of the Depositary and approval from the FCA. The funds are Investment Association and of The Investing and Saving operated separately and the assets of each fund are Alliance (formerly Tax Incentivised Savings Association)) managed in accordance with the investment objective Directors of the ACD and policy applicable to that fund. C Dobson (non executive director), S A Fitzgerald, As at 31 December 2020 none of the funds held shares P R Jelfs, M McGrade (non executive director), of the other funds within this OEIC. LJMumford Interim Long Report and unaudited Financial Statements• December 2020 1 Authorised Corporate Director’s Report Investment manager On 15 December 2020, the following share classes M&G Investment Management Limited, were closed within the M&G Global Government Bond 10 Fenchurch Avenue, London EC3M 5AG, UK Fund: Euro Class ‘A’ Income, Euro Class ‘A’ Telephone: +44 (0)20 7626 4588 Accumulation, Euro Class ‘C’ Accumulation, Swiss franc (Authorised and regulated by the Financial Conduct Class ‘A’ Accumulation, Swiss franc Class ‘C’ Authority) Accumulation, US dollar Class ‘A’ Income, US dollar Class’ A’ Accumulation and US dollar Class ‘C’ Registrar Accumulation. SS&C Financial Services Europe Ltd, Investors will benefit from a reduction in the annual SS&C House, St. Nicholas Lane, Basildon, charge starting from 15 February 2021. The reduction in Essex SS15 5FS, UK annual charge varies across the M&G funds and the (Authorised and regulated by the Financial Conduct detail was communicated in the shareholder letter Authority) dated 15 January 2021. Depositary The World Health Organisation declared the COVID-19 NatWest Trustee & Depositary Services Limited, outbreak a pandemic on 11 March 2020. House A, Floor 0, Gogarburn, 175 Glasgow Road, Global financial markets have been reacting to the EdinburghEH121HQ,UK outbreak. All markets have incurred increased volatility (Authorised and regulated by the Financial Conduct and uncertainty since the onset of the pandemic. Authority) The ACD has also noted the operational risks that are Independent auditor posed to the Company and its service providers due to Ernst & Young LLP global and local movement restrictions that have been Atria One,144 Morrison Street, Edinburgh EH3 8EX, UK enacted by various governments. The COVID-19 pandemic is an unprecedented event Annual value assessment and the eventual impact on the global economy and An annual assessment report is available which shows markets will largely depend on the scale and duration of the value provided to investors in each of M&G’s the outbreak. The ACD will continue to monitor this UK-based funds. The assessment report evaluates situation. whether M&G’s charges are justified in the context of the overall service delivered to its investors. The report can be found at www.mandg.co.uk/valueassessment Important information On 16 July 2020, the following share classes were closed within the M&G Global Government Bond Fund: Euro Class ‘C’ Income and US dollar Class ‘C’ Income. On 16 October 2020 the benchmark was changed for M&G Global Government Bond Fund. On 15 December 2020, the following share classes were closed within the M&G Corporate Bond Fund and the M&G Recovery Fund: Euro Class ‘A’ Accumulation and Euro Class ‘C’ Accumulation. 2 Interim Long Report and unaudited Financial Statements• December 2020 Authorised Corporate Director’s Report Investor information The Prospectus, Instrument of Incorporation, Key Investor Information Documents, costs and charges illustration, the latest Annual or Interim Investment Report and Financial Statements as well as a list of purchases and sales are available free of charge on request from the following addresses. The Instrument of Incorporation can also be inspected at our offices or attheofficeoftheDepositary. Customer services and administration for UK clients: M&G Securities Limited, Box 9039, Chelmsford CM99 2XG, UK Please remember to quote your name and M&G client reference and sign any written communication to M&G. Failure to provide this will affect your ability to transact with us. Telephone: 0800 390 390 (UK only) For security purposes and to improve the quality of our service, we may record and monitor telephone calls. You will require your M&G client reference. Failure to provide this will affect your ability to transact with us. Customer services and administration for non-UK clients: M&G Securities Limited, c/o RBC I&TS, 14, Porte de France, L-4360 Esch-sur-Alzette, Grand Duchy of Luxembourg Please remember to quote your name and M&G client reference and sign any written communication to M&G. Failure to provide this will affect your ability to transact with us. Telephone: +352 2605 9944 Email: [email protected] For security purposes and to improve the quality of our service, we may record and monitor telephone calls. You will require your M&G client reference. Failure to provide this will affect your ability to transact with us. Swiss paying agent and representative: Société Générale, Paris, Zurich Branch, Talacker 50, 8021 Zurich, Switzerland Interim Long Report and unaudited Financial Statements• December 2020 3 Authorised Corporate Director’s Report Authorised Corporate Director’s Responsibilities The Authorised Corporate Director (ACD) is required to prepare annual and interim long reports for the Company. The ACD must ensure that the financial statements, contained in this report, for each of the funds are prepared in accordance with the Investment Association Statement of Recommended Practice for Financial Statements of UK Authorised Funds (SORP) and UK Financial Reporting Standards, and give a true and fair view of the net revenue or expenses and net capital gains or losses for the accounting period, and the financial position at the end of that period. The ACD is required to keep proper accounting records, and to manage the Company in accordance with the Collective Investment Schemes sourcebook, as issued (and amended) by the FCA, the Instrument of Incorporation and the Prospectus, and to take reasonable
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