M&G Global Macro Bond FundSterling Class I – Accumulation sharesMonthly Fund Review as at 29 February 2020For investment professionals only

Highlights• Risk-averse sentiment prevailed among global investors as concerns about the coronavirus increased.• Core government bond yields declined amid a preference for perceived safe-havens, which pushed up bond prices.• We again lengthened duration and added to the fund’s US dollar allocation in the month.

The main risks associated with this fundFor any past performance shown, please note that past performance is not a guide to future performance.The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested. Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund. High yield bonds usually carry greater risk that the bond issuers may not be able to pay interest or return the capital. The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment. The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund. Investing in emerging markets involves a greater risk of loss as there may be difficulties in buying, selling, safekeeping or valuing investments in such countries. Further risk factors that apply to the fund can be found in the fund's Key Investor Information Document (KIID).

Single year performance (5 years)

2019 2018 2017 2016 2015 Sterling I Accumulation 4.4% 3.7% -3.8% 25.3% 0.9% IA Global Bonds 5.6% 0.2% 1.9% 16.3% -1.4%

Performance over 5 years

85.0

100.0

115.0

130.0

145.0

160.0

Inde

xed

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Jan 15 Dec 15 Dec 16 Dec 17 Dec 18 Jan 20

Sterling I Accumulation (136.9) IA Global Bonds (122.8)

Fund performance

1 month (%) 3 months (%) YTD (%) 1 year (%) 3 years (%)p.a.

5 years (%)p.a.

Sterling I Accumulation 3.0% 3.3% 4.1% 10.3% 2.6% 6.3% IA Global Bonds 1.4% 2.1% 2.4% 8.4% 3.0% 4.8%

Past performance is not a guide to future performance.Performance comparison: The fund is actively managed. The benchmark is a comparator against which the fund’s performance can be measured. The sector hasbeen chosen as the fund’s comparator benchmark as the fund is a constituent of the sector. The comparator benchmark does not constrain the fund's portfolioconstruction.

Source: Morningstar, Inc and M&G, as at 29 February 2020. Returns are calculated on a price to price basis with income reinvested.Benchmark returns stated in GBP terms.

Performance charts © 2020 Morningstar Inc., All Rights Reserved. The information contained within: (1) is proprietary to Morningstar and/or its content providers;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for anydamages or losses arising from any use of this information.

Key informationFund manager Jim LeavissFund manager tenure from 15 October 1999Deputy fund manager Claudia CalichISIN GB00B78PGS53Launch date of fund 15 October 1999Launch of share class 16 December 2011Fund size (millions) £ 1,232.17Benchmark IA Global sectorBenchmark type ComparatorSector IA Global Bonds sectorNumber of issuers 95Distribution yield 1.71%Underlying yield 1.71%Average credit rating A+Modified duration (years) 7.63VaR 2.72%Average coupon 2.26Spread duration (years) 0.4Payment dates Mar, Jun, Sep, DecEx-dividend dates Feb, May, Aug, Nov

ChargesMaximum entry charge 0.00%Ongoing charge 0.78%

Things you should knowThe fund may invest more than 35% in securities issued by any one or more of thegovernments listed in the fund prospectus. Such exposure may be combined with theuse of derivatives in pursuit of the fund objective. It is currently envisaged that thefund’s exposure to such securities may exceed 35% in the governments of Germany,Japan, UK, USA although these may vary subject only to those listed in theprospectus.The fund allows for the extensive use of derivatives.

Fund ratingsMorningstar Analyst rating

Overall Morningstar rating QQQQDefaqto Rating 3 DiamondsFinancial Express Crown Rating

Fund Calibre Rating YesFundhouse Rating Tier 2RSM rating YesSource of Morningstar ratings: Morningstar, as at 29 February 2020Source: Defaqto, as at 29 February 2020Source: Financial ExpressSource: FundCalibreSource: Fund HouseSource: RSM

Ratings should not be taken as a recommendation.

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Asset breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetGovernment bonds 67.0 0.0 0.0 67.0Investment grade corporate bonds 17.5 -12.1 0.0 5.4Fixed rate 4.8 0.0 0.0 4.8Floating rate 12.2 0.0 0.0 12.2Index linked 0.5 0.0 0.0 0.5Credit default swap indices 0.0 -12.1 0.0 -12.1High yield corporate bonds 2.4 -4.5 1.5 -0.6Fixed rate 2.4 0.0 0.0 2.4Floating rate 0.0 0.0 0.0 0.0Index linked 0.0 0.0 0.0 0.0Credit default swap indices 0.0 -4.5 1.5 -3.0Securitised 2.7 0.0 0.0 2.7Emerging markets 10.0 -3.6 0.0 6.5Equities 0.0 0.0 0.0 0.0Other 0.0 0.0 0.0 0.0Cash 0.4 0.0 0.0 19.0

Credit rating breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetAAA 16.3 0.0 0.0 16.3AA 54.3 0.0 0.0 54.3A 8.7 0.0 0.0 8.7BBB 13.2 -12.1 0.0 1.1BB 4.3 -3.6 0.0 0.7B 2.4 -4.5 1.5 -0.6CCC 0.3 0.0 0.0 0.3CC 0.1 0.0 0.0 0.1C 0.0 0.0 0.0 0.0D 0.0 0.0 0.0 0.0No rating 0.0 0.0 0.0 0.0Cash 0.4 0.0 0.0 19.0

Country breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetUS 50.8 0.0 0.0 50.8UK 18.3 0.0 0.0 18.3Japan 4.9 0.0 0.0 4.9Germany 4.0 0.0 0.0 4.0Canada 2.3 0.0 0.0 2.3France 1.9 0.0 0.0 1.9Norway 1.7 0.0 0.0 1.7Brazil 1.5 0.0 0.0 1.5Other 14.2 0.0 0.0 14.2High Yield indices 0.0 -4.5 1.5 -3.0Investment Grade indices 0.0 -12.1 0.0 -12.1Cash 0.4 0.0 0.0 19.0Other 0.0 -3.6 0.0 -3.6

Largest issuers (%)Fund

US 43.8UK 9.5Japan 4.9Germany 4.0Norway 1.7Canada 1.6European Bank for Reconstruction and Development 1.5Citigroup 1.4Australia 1.3Brazil 1.3

Maturity breakdown (%)Physical

0 - 1 years 4.61 - 3 years 5.43 - 5 years 30.75 - 7 years 4.17 - 10 years 40.710 - 15 years 1.415+ years 12.8Cash 0.4

Currency breakdown (%)Pre-hedge Post-hedge

US dollar 57.4 43.6Japanese yen 4.9 22.9Euro 8.3 12.6British pound 18.1 10.3Norwegian kroner 1.7 2.4Danish krone 0.0 1.8Swedish krona 0.0 1.6Canadian dollar 1.6 1.6Brazilian real 1.3 1.2Other 6.7 2.0

Industry breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetSovereign 72.4 0.0 0.0 72.4Banking 9.4 0.0 0.0 9.4Supranational 3.0 0.0 0.0 3.0Foreign Sovereign 2.8 0.0 0.0 2.8Mortgage backed 1.7 0.0 0.0 1.7Telecommunications 1.6 0.0 0.0 1.6Healthcare 1.5 0.0 0.0 1.5Covered Bonds 1.1 0.0 0.0 1.1Insurance 1.1 0.0 0.0 1.1Energy 1.0 0.0 0.0 1.0Asset backed 0.9 0.0 0.0 0.9Real Estate 0.5 0.0 0.0 0.5Local-Authority 0.4 0.0 0.0 0.4Technology & electronics 0.4 0.0 0.0 0.4Services 0.4 0.0 0.0 0.4Financial services 0.2 0.0 0.0 0.2Basic industry 0.2 0.0 0.0 0.2Media 0.2 0.0 0.0 0.2Utility 0.2 0.0 0.0 0.2Consumer goods 0.2 0.0 0.0 0.2Retail 0.2 0.0 0.0 0.2Leisure 0.1 0.0 0.0 0.1Commercial Mortgage Backed 0.0 0.0 0.0 0.0Quasi & foreign government 0.0 -3.6 0.0 -3.6Investment Grade indices 0.0 -12.1 0.0 -12.1High Yield indices 0.0 -4.5 1.5 -3.0Cash 0.4 0.0 0.0 19.0

Duration by currency and asset classFund Futures Swaps Net

Euro 0.3 0.0 0.5 0.7British pound 0.9 0.5 0.0 1.4US dollar 4.4 0.0 0.0 4.4Other 1.1 0.0 0.0 1.1Total 6.7 0.5 0.5 7.6

CommentaryThe coronavirus outbreak dominated sentiment in global financial markets as February progressed, with investors focused on the implicationsof the spread of the disease to many countries outside China. Equity markets recorded steep declines, while core government bond yields fellamid a flight to perceived safe-haven assets, which pushed up bond prices.This backdrop also helped the US dollar and Japanese yen to find support in the currency markets. However, areas of corporate bonds andemerging market debt sold off amid the risk-averse environment. In core government markets, 10-year US Treasury yields declined to 1.1%from 1.5%, while 10-year German bund yields fell further into negative territory to -0.6% from -0.4%. In the UK, 10-year gilt yields fell to 0.4%from 0.5%.The fund remained invested in a globally diversified bond portfolio. Our main adjustments to the fund’s positioning in the year-to-date periodinclude significantly lengthening its duration. We continued to increase duration in February, which helped the fund deliver a positive return asyields fell. Among other favourable considerations, the fund’s two largest exposures within its currency positioning, to the US dollar andJapanese yen, performed well.

Key changesActive management of the fund’s duration, as well as its credit risk and currency exposures, remain its key long-term performance drivers.During February, we maintained our recent preference to position the fund defensively, a stance that largely reflects our cautious economicoutlook. At the end of the month, the fund’s duration stood at 7.6 years, up from 6.6 years.The US dollar remained the fund’s largest contributor to its duration by currency. During the month, the duration contributions from the USdollar and sterling were increased. Among other developed markets, the fund’s duration contributors by currency include the Australian dollar,based partly on the prospect of lower interest rates in the country (the Reserve Bank of Australia confirmed a 0.5% cut in interest rates on 2March).In corporate bond markets, our overall approach to exposure remained cautious, which included keeping an underweight position toinvestment grade credit. We also kept a significantly underweight allocation to high yield bonds, with credit default swap (CDS) instrumentshelping to maintain this stance.Despite the coronavirus theme, we continued to hold select exposures to emerging market bonds based on our constructive view of long-termvaluations. However, within our emerging market allocation, some local currency positions were lowered, including the Indonesian rupiah aftergood performance. We also reduced exposure to the Malaysian ringgit, a currency sensitive to the coronavirus concerns. Among corecurrencies, we added back US dollar exposure amid the global risk-off environment, while the fund’s sterling position was reduced. In Europe,we maintained Swedish and Norwegian currency positions, trimmed the fund’s euro weighting, and added to a Danish krone allocation.

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Fund codes and charges

Share class ISIN Bloomberg CurrencyLaunch date of

fundOngoing

chargeDistribution

yieldUnderlying

yield

Minimuminitial

investment

Minimumtop up

investmentSterling A Acc GB0031616815 MGSGMBA LN GBP 15/10/1999 1.28%* 1.22% 1.22% £500 £100Sterling A Inc GB0031616708 MGSGMBI LN GBP 15/10/1999 1.28%* 2.47% 1.22% £500 £100Sterling A-H Acc GB00BVYJ0W14 MGGSAHA LN GBP 07/08/2015 1.31%* 1.20% 1.20% £500 £100Sterling A-H Inc GB00BVYJ0X21 MGGSRAI LN GBP 07/08/2015 1.31%* 2.50% 1.20% £500 £100Sterling I Acc GB00B78PGS53 MGGMIGA LN GBP 16/12/2011 0.78%* 1.71% 1.71% £500,000 £10,000Sterling I Inc GB00B78PH601 MGGMIGI LN GBP 16/12/2011 0.78%* 2.47% 1.71% £500,000 £10,000Sterling I-H Acc GB00BVYJ0Y38 MGGSIHA LN GBP 07/08/2015 0.81%* 1.70% 1.70% £500,000 £10,000Sterling I-H Inc GB00BVYJ0Z45 MGGSIHI LN GBP 07/08/2015 0.81%* 2.50% 1.70% £500,000 £10,000Sterling R Acc GB00B78PLC47 MGGMBRA LN GBP 03/08/2012 1.03%* 1.46% 1.46% £500 £100Sterling R Inc GB00B45PMD45 MGGMBRI LN GBP 03/08/2012 1.03%* 2.47% 1.46% £500 £100Sterling R-H Acc GB00BVYJ1063 MGGSRHA LN GBP 07/08/2015 1.06%* 1.45% 1.45% £500 £100Sterling R-H Inc GB00BVYJ1170 MGGSRHI LN GBP 07/08/2015 1.06%* 2.50% 1.45% £500 £100Sterling X Acc GB0031960361 MGGMBXA LN GBP 01/10/2002 1.28%* 1.22% 1.22% £500 £100Sterling X Inc GB0031960254 MGGMBXI LN GBP 01/10/2002 1.28%* 2.48% 1.22% £500 £100Sterling X-H Acc GB00BVYJ1287 MGGXHAC LN GBP 07/08/2015 1.31%* 1.20% 1.20% £500 £100Sterling X-H Inc GB00BVYJ1394 MGGXHIN LN GBP 07/08/2015 1.31%* 2.50% 1.20% £500 £100

Any ongoing charge figure with * indicates an estimate. The ongoing charge figure may vary from year to year and excludes portfolio transaction costs. The charges are mostly, if not exclusively, the Annual Charge which may be discounted depending on the size of the fund. For furtherdetails, please see the fund’s Key Investor Information Document (KIID). The fund's annual report for each financial year will include details on the exact charges made.Please go to www.mandg.co.uk/literature to view the Costs and charges illustration which contains information on the costs and charges applicable to your chosen fund and share class.Please see the Important Information for Investors document and the relevant Key Investor Information Document for more information on the risks associated with this fund and which share classes are available for which product and which investor type.

Important informationCash may be held on deposit and/or in the Northern Trust Cash Funds, a range of collective investment schemes.

The M&G Global Macro Bond Fund is a stand alone OEIC.

Sector: Morningstar category averages represent the average return of funds within their category over time. The category averages are created by using the average daily total return index series, or TRI, as well as monthly, quarterly, and annual averages of return and non-return data.Morningstar applies a fractional weighting methodology whereby, on the last day of each month, the funds are equally weighted and the share classes within each fund are equally weighted. Fractional weighting ensures that funds with multiple share classes do not dominate and skewthe returns of the average, thus presenting the peer group performance in a fair and consistent manner.

The Morningstar Analyst Rating™. © 2020 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.

The Morningstar Overall Rating based on the fund’s Sterling Class I shares. Copyright © 2020 Morningstar UK Limited. All Rights Reserved. Ratings should not be taken as recommendation.

Where a security has not been rated by Standard & Poor’s, Fitch or Moody’s, we may use M&G’s internal credit rating. Based on a comparison of all available ratings for each security, the most conservative rating (S&P, Fitch, Moody’s or M&G’s internal rating) is taken into consideration.The ratings so identified are then expressed or converted into M&G’s ratings format to obtain uniform information for all securities in the portfolio.

For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAsand other investment products. The company’s registered office is 10 Fenchurch Avenue, London EC3M 5AG. Registered in England No. 90776

Contact M&GPrivate Investorswww.mandg.co.uk/investor0800 390 390Charitieswww.mandg.co.uk/charities

Intermediary & Wealthwww.mandg.co.uk/adviserInstitutionalwww.mandg.co.uk/institutions

For your protection calls may be recorded or monitored. 3 / 32003

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