Sometimes we forget that the human factor plays the main role in the management of an investment fund. Investment instruments or vehicles are very important in our financial community, as they give us access to a wide range of assets, strategies and ways to invest, but we should not make the mistake of thinking that these instruments have a life of their own. Decision making is done by people and it would be a mistake to omit that factor when analyzing or choosing an investment fund, since not all people (managers) have the ability, conviction and patience to do better than others.
M & G is a management company founded in 1931 and with a long tradition in the United Kingdom, with more than 362 billion euros in assets under management. One of its stars is the M & G Optimal Income Fund, managed by Richard Woolnough and discussed below.
The investment fund M & G Optimal Income was launched on 8 December 2006 and since then the manager has maintained it in the first quartile of the EUR-Global Defensive Mixed Morningstar sector, consistently beating benchmark indices and ranking as one of the best funds of its category.
Evolution Optimal Income
Since its inception, the fund has navigated in different bullish and bearish markets and its flexible mandate has allowed the manager to position itself in a correct way against most scenarios experienced in the markets. Even in September 2016 for the first time since its launch, it demonstrated its broad flexibility and active focus by putting its fixed-income positions short in the UK in response to the growing threat of inflation and rising prices the bonuses since the referendum on the EU.
The manager’s philosophy is clearly oriented to active management, always trying to anticipate trends or opportunities instead of following the market direction.
Yes, it is mainly a bond fund but has the ability to move to the most attractive areas at any point in the economic cycle
As for its investment policy in the M & G Optimal Income Fund, we are talking about a flexible fund that will invest at least 50% in bonds but free to invest in a wide range of assets, from bonds to shares (<20% ) And denominated in any currency.
This type of flexible, well-managed funds gives the manager the freedom to alter the sensitivity of the fund to movements in interest rates or changes in expectations for the global economy. This flexibility of assets and strategies contrasts with other less flexible fixed income funds, which typically invest in a single country or asset, such as corporate bonds or government bonds.
In addition, it offers a number of advantages in the current economic climate, where interest rates and bond yields around the world could finally begin to rise from record lows.
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Weights optimal income
Optimal income pesos 2
In summary, the M & G Optimal Income Fund is a flexible fixed income fund whose main objective is to select those assets that offer a greater attractiveness to the portfolio.
The risk profile of the fund is moderate (3 on a scale of 1 to 7), with historical volatility ranging from 3% to 5%. Despite these levels of risk, the fund has an average profitability in the last 5 years very interesting, especially if compared to other funds of the same category.
Our experience and analysis tells us that Richard Woolnough is a disciplined, insightful manager with the practice to navigate any ocean.
Whether or not to invest in the M & G Optimal Income fund should always be on the investor’s shoulders, but we can say that for investors looking for a flexible bond fund of a moderate profile, this could be a good fund.
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