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Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
Pand presentation citywire luxembourg 22 apr 10
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Pand presentation citywire luxembourg 22 apr 10

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  • Notes Presentation Title Page Date Type name of Presenters
  • 2010 01 28 GII Quality income scarce as low yields narrow the focus.pdf, p13
  • So what are those core beliefs for the value fund? We believe: narrow time horizons and behavioural biases mean investors typically place to high a risk premia on unfashionable stocks This occurs as the investment analysis done on each individual stock they are trying to answer the following questions will this mean revert if so – will it do so in my investment time horizon when it happens – how much is it worth With these types of a companies, it is actually very difficult to answer these questions for each individual stock. As a result, they tend to be shunned by people until clarity emerges – the catalyst, the positive newsflow, the takeover speculation, the asset disposal etc etc. However, we think this provides an excellent opportunity for us as we are uninterested in answering these questions for an individual stock, all we care about is what is the likelihood that if you take a basket of these types of stocks, a number of them (which ones we don’t know) will at least mean revert. Gives us the opportunity to benefit from this fallacy of composition, or the fact that individually these stocks may be ugly but collectively they are beautiful . Given the fallacy of composition, this will more than adequately compensate us for those that don’t, because the high risk premium allows for assymetric returns for the group. The fallacy of composition is committed when a conclusion is drawn about a whole based on the features of its constituents when, in fact, no justification provided for the inference. Analysts only see the negative in unloved/unfashionable stocks and then conclude that everything about those stocks is bad. They “load up” the negatives
  • Government hedonism and the next policy mistake.pdf, 11 Feb 2010
  • Munich Re is a high quality, out of favour company, perceived to be boring by the market. However, the firm has a high dividend yield (4.75%) that is well covered by earnings and a very strong balance sheet that can fund that dividend. The company has over €6bn of excess capital in the form of pure equity. The firm is also committed to rewarding shareholders through dividends (which have increased annually by 34.5% in the last five years) and returning capital through share buybacks. It is a 2.4% holding in the M&G Pan European Dividend Fund. All data as at 29/3/10, source M&G, Bloomberg Dividend yield 4.75% Dividend cover 2.3x Balance sheet strength Excess capital: pure equity €6bn buffer 5-year dividend CAGR: 34.5% Plus Share buybacks
  • 16 October 2009: PE’09 14x, EV/EBIT 10x, 6% FCF, 3.6% yield Break-up option – SOTP 1200p+ Mkt priced as 10% margin buz – but cycle>15%, 20% likely pricing in “2001” CFROI, if c20% =£13p on 5y fade, but been 10y
  • 16 October 2009: PE’09 14x, EV/EBIT 10x, 6% FCF, 3.6% yield Break-up option – SOTP 1200p+ Mkt priced as 10% margin buz – but cycle>15%, 20% likely pricing in “2001” CFROI, if c20% =£13p on 5y fade, but been 10y
  • Transcript

    • 1. 22 April 2010 Citywire Luxembourg M&G Pan European Dividend Fund
    • 2. The fund manager
      • Joined M&G in 1999 as an insurance equity analyst
      • Member of the European Equities team since 2001
      • CFA charterholder
      • Manager of the M&G Pan European Dividend Fund and the M&G European Strategic Value Fund
      • Manager of Prudential dividend-based European equities mandates since 2002
      Richard Halle
    • 3. Agenda
      • Dividend strategies work over the long term
      • Why now is a pivotal moment in the dividend cycle
      • M&G’s approach and dividend offering in Europe
    • 4. High dividend paying stocks outperform The long-term view Source: SocGen, The Global Income Investor, February 2010. Global ex-US universe Cumulative returns from buying stocks with above-average versus below-average dividend
    • 5. M&G Charifund (M&G’s oldest dividend fund) Charifund FTSE All-Share Index Source: Morningstar, M&G Statistics as at 31 January 2010. Bid to bid, net income reinvested Please note that this fund is not registered in Switzerland and is not available for public distribution Relative to FTSE All-Share Index Cumulative total return relative to index 50-year real life experience showing dividend investing works
    • 6. Dividend strategies work over the long term
      • Dividends account for the majority of equity returns
      • Dividend yields are a useful valuation signal
      • Dividends impose discipline on corporate management
      • Dividend yield targets impose discipline on fund manager
    • 7. Agenda
      • Dividend strategies work
        • Why has there been so little interest in dividends?
      • Why should there be interest now
      • M&G’s approach and dividend offering in Europe
    • 8. Long-term government bond performance Good returns did not push people to seek risky equities Source: Merrill Lynch, EMU Direct 31 December 2009 Total return % Bull market in bonds
    • 9. European equity returns Total return % Bull markets conditioned investors to focus on capital gains… Source: Datastream, European market, end 1974 to end 2009
    • 10. Agenda
      • Dividend strategies work over the long term
      • Why now is a pivotal moment in the dividend cycle
      • M&G’s approach and dividend offering in Europe
    • 11. Equity dividend yields now higher than bond yields Source: DataStream, European market dividend yield versus nominal 10yr German government bond yield from Dec 1979 to March 2010 Equities yielding more than bonds
    • 12. Are government bonds really risk-free? Source: SocGen, National Center for Policy Analysis, OECD. February 2010 Debt as % of GDP
    • 13. Corporate balance sheets are strong Source: M&G, Factset, FTSE World Europe, December 2009 Debt to common equity European corporates becoming less leveraged
    • 14. Dividends have been quickly rebased A record year for dividend cuts in Europe Source: ScoGen, February 2010 European dividend growth Y/Y%
    • 15. Why now? Source: M&G, January 2010, PIMCO, Investment Outlook, July 2009 Even non-dividend investors like dividends Aled Smith, M&G “ Everybody knows about the power of dividends and how they contribute to total shareholder return. .. The top five countries in dividend growth are the same top five countries in total shareholder return” Bill Gross, PIMCO “ Investors who stuffed themselves on a constant diet of asset appreciation … should stress secure income offered by bonds and stable dividend-paying equities”
    • 16. Agenda
      • Dividend strategies work over the long term
      • Why now is a pivotal moment in the dividend cycle
      • M&G’s approach and dividend offering in Europe
    • 17. Investment philosophy
      • Dividends are undervalued by a market seeking instant gratification, despite being the largest component of total return
      • Not all dividends are created equal
      • High dividend yields are a good place to find attractive risk/reward opportunities
      • High dividend yields do not necessarily mean low growth
    • 18. M&G Pan European Dividend Fund
      • Invest in companies with quality yield and positioned to grow the dividend
      • Grow the portfolio’s dividend income ahead of inflation
      • Portfolio yield premium to market typically 10-30%
      Investment objectives What are the key portfolio characteristics?
    • 19. Why do we focus on quality yield? Source: Soc Gen, The Global Income Investor, February 2009 Balance sheet strength adds to returns and protects against downside European ex UK total returns of different dividend yield strategies
    • 20. What do we mean by quality yield? Dividends are the strongest signal of capital allocation discipline Dividend cover Balance sheet strength Willingness to pay dividends
    • 21. Investing in growing dividends Looking for sustainable, quality, growing dividends Turnaround / improving companies Out of favour high-quality companies Highly operationally / financially leveraged companies O Sustainable, reliable dividend growers Investment universe SMART DIVIDEND SCREEN Balance sheet quality Dividend cover Earnings quality Asset backing Implied returns Dividend track record
    • 22. Investing in growing dividends Looking for sustainable, quality, growing dividends Turnaround / improving companies Out of favour high-quality companies Highly operationally / financially leveraged companies O Sustainable, reliable dividend growers
    • 23. Out of favour, quality companies Munich Re Source: Bloomberg, M&G, KBW, 29 March 2010 5-year dividend CAGR: 34.5% Share buybacks Willingness to pay dividends Excess capital: €6bn buffer Balance sheet strength 2.3x Dividend cover 4.75% Dividend yield
    • 24. Sustainable, reliable dividend growers Nestl é Source: Bloomberg, M&G, JP Morgan, 29 March 2010 5-year dividend CAGR: 14.2% Share buybacks Willingness to pay dividends Virtually debt free Sale of Alcon Balance sheet strength 2.0x Dividend cover 3.20% Dividend yield
    • 25. Turnaround, improving companies Smiths Group – industrial and technology conglomerate Source: Bloomberg, M&G, 29 March 2010 5-year dividend CAGR: 4.3% Committed to cashflow-returning businesses New management Willingness to pay dividends 25% of capital employed in businesses to be sold 8.0x interest cover Balance sheet strength 2.5x Dividend cover 2.96% Dividend yield
    • 26. What to avoid – The wrong type of dividend Lafarge – Construction materials Source: Bloomberg, M&G, 29 March 2010 5-year dividend CAGR: 0.02% Poor acquisition record Numerous rights issues" Willingness to pay dividends High earnings volatility High debt levels Debt/equity: 106.7% Balance sheet strength 2.1x Dividend cover 3.80% Dividend yield Dividends per share and shares outstanding
    • 27. Portfolio characteristics Gross Dividend yield, % Yield premium of 23% Source: M&G, Bloomberg, March 2010, versus FTSE World Europe index Higher and more sustainable yield than the benchmark Debt/EBIDTA (ex financials) Lower debt Dividend cut probability Greater resilience to cuts M&G Pan European Dividend Fund FTSE World Europe Index
    • 28. M&G Pan European Dividend Fund Cumulative returns since launch Source: M&G, Datastream, euro share class A, bid to bid, after fees, from 18/07/2008 to 31/03/2010
    • 29. Richard Halle’s internal European dividend mandate Cumulative outperformance since 2002 Source: M&G, Xamin, monthly returns in euros, gross of fees, 31/12/2001 to 31/03/2010 The Pan European segment of the Prudential World Value Fund is a dividend-based mandate managed by Richard Halle since 31/12/01. The M&G Pan European Dividend Fund follows the same investment process and was launched on 18/07/08. Base mandate replicated in the M&G Pan European Dividend Fund – Successful, tried and tested approach
    • 30. Pan European Dividend Fund
      • Dividends deliver higher total returns
      • Now is the time to invest in dividends
      • M&G has 50 years experience in managing dividend strategies
      • Proven approach of our European mandates
      Summary
    • 31. Appendix Appendix M&G Pan European Dividend Fund
    • 32. Fund facts
      • Fund manager: Richard Halle (since July 2008)
      • Launch date: 18 July 2008
      • Fund size: € 26.1 million
      • Benchmark: FTSE World Europe Index
      • Fund manager objective: “Long term capital growth from a portfolio of European companies”
      Source: M&G as at 31 March 2010 M&G Pan European Dividend Fund
    • 33. Top 10 holdings Source: M&G, as at 31 March 2010 Name Managed Benchmark Relative BP 5.4 2.0 3.4 Total 5.0 1.6 3.4 Sanofi-Aventis 5.0 1.1 3.9 Vivendi 4.4 0.4 4.1 Vodafone 4.2 1.4 2.8 TNT 3.8 0.1 3.7 BNP Paribas 3.5 1.0 2.5 HSBC 3.5 2.0 1.5 E.On 2.7 0.9 1.8 Credit Suisse 2.6 0.7 2.0
    • 34. Sector breakdown Sector Managed Benchmark Relative Financials 20.3 23.3 -3.0 Consumer Goods 15.6 14.3 1.3 Oil & Gas 12.6 10.5 2.2 Consumer Services 10.7 7.0 3.7 Health Care 9.8 8.1 1.7 Telecommunications 9.5 6.5 3.0 Industrials 8.9 10.4 -1.6 Utilities 6.1 8.0 -1.9 Basic Materials 5.1 9.3 -4.2 Technology 1.2 2.7 -1.5 Cash 0.2 0.0 0.2 Source: M&G, as at 31 March 2010
    • 35. Current fund positioning Source: M&G, end March 2010 Active weights Active weights by industry and quarter, % Active weights, % Consistent underweight in basic materials, financials; overweight in consumer services, telcos
    • 36. Country breakdown Country Managed Benchmark Relative Austria 1.1 0.8 0.2 Austria 1.1 0.8 0.2 Belgium 3.0 2.3 0.7 Cash 0.2 0.0 0.2 Denmark 0.0 1.6 -1.6 Eire 0.5 0.4 0.1 Finland 1.2 1.7 -0.5 France 22.9 18.2 4.7 Germany 16.4 11.6 4.8 Greece 2.0 0.7 1.3 Hungary 0.0 0.3 -0.3 Italy 2.1 5.9 -3.9 Netherlands 13.2 4.2 9.1 Norway 0.8 1.9 -1.1 Poland 0.0 1.1 -1.1 Portugal 0.0 0.9 -0.9 Spain 1.4 6.9 -5.5 Sweden 3.5 3.9 -0.4 Switzerland 9.3 10.2 -0.9 United Kingdom 22.4 27.3 -4.8 Source: M&G, as at 31 March 2010
    • 37. Market cap split Source: M&G, as at 31 March 2010 Market cap band Fund % Index % Relative % >€ 50 billion 41.4 29.3 12.1 € 25 - €50 billion 17.2 27.2 -10.0 € 5 - €25 billion 27.5 33.6 -6.1 € 2.5 - € 5 billion 8.5 8.0 0.6 <€ 2.5 billion 5.1 1.9 3.1 Cash 0.2 0.0 0.2
    • 38. True to label – dividend measures dominate Portfolio skyline – M&G Pan European Dividend Fund Source: Style Research as at end March 2010 Sustainable dividends from less volatile firms Portfolio tilts vs. Benchmark Value Growth Standard deviation from benchmark mean Other
    • 39. Portfolio construction Source: M&G, 15 April 2010 Dividend yield by holding Combining high yielding names with stocks that will grow their dividend High yielders Dividend growers
    • 40. Dividend growth counts almost as much as dividend yield Investment process designed to capture both dividend yield AND dividend growth Contribution to total real returns – US data since 1871 (5-year periods) Source: SG Global Strategy Research as at February 2009 0 20 40 60 80 100 Dividend yield Growth in dividend Change in valuation
    • 41. M&G Pan European Dividend Fund Evolution of dividend yield bias Consistently high dividend yield bias Source: M&G, Barra, since launch (July 2008) to February 2010
    • 42. Richard Halle’s internal European dividend mandate Annual investment returns vs. MSCI Europe since tenure (31 December 2001) Source: M&G, Xamin, portfolio returns (gross of fees), in sterling, to 31/03/2010 Calendar year performance since 2002
    • 43. Portfolio construction
      • Focused portfolio of 40-60 stocks
      • Sector, geographical or market cap biases are a by-product of bottom-up stock selection
      • Stock weightings ranked accordingly to valuation and conviction
    • 44. Recent new purchases and completed sales Source: M&G, March 2010 M&G Pan European Dividend Fund None None Jan-10 Anglo American, Tessenderlo None Feb-10 None FBD Holdings, Prudential Mar-10 None CFAO Dec-09 None None Nov-09 None Leoni Oct-09 Completed sales New purchases
    • 45. M&G European Equities team
    • 46. M&G European Equities – product range M&G European Strategic Value M&G Pan European Dividend Fund M&G Global Convertibles Fund M&G European M&G European Special Situations Three approaches to delivering performance Product range covering all client needs VALUE GROWTH CHANGE M&G Pan European M&G European Smaller Companies
    • 47. Understanding the company lifecycle Time Returns Bringing the three approaches together… … and exploiting market inefficiency across the company lifecyle M&G European Special Situations Fund Change Value M&G European Strategic Value Fund M&G Pan European Fund Growth
    • 48. M&G European Equities European Equities Team James Alexander (Head of Analyst team) Chantal Waight Jujhar Sohi Gillian Tiltman Financials Consumer Alistair Smith Ally Brownsword Anita Ahuja Industrial & Energy Graham Phillips Sachin Oza John Weavers TMT Upin Dattani Michael Moore Rory Alexander Source M&G, March 2010 Industry Analyst Team Growth Giles Worthington Charles Anniss Change Michael Stiasny Value Richard Halle Daniel White Convertibles L éonard Vinville An established structure of talent and resources Portfolio analyst David Romaní Fund managers’ assistants Simon Conner Maria Municchi Portfolio Strategy & Risk Tim Short Irene Tunkel Juan Pablo Salgado Ritu Vohora Research co-ordinator Natalie Johnson
    • 49. Fund management team M&G European Equities Source: M&G, March 2010 M&G Global Convertibles Fund M&G European Strategic Value Fund M&G European Strategic Value Fund M&G Pan European Dividend Fund M&G European Special Situations Fund M&G European Fund M&G European Smaller Companies Fund M&G Pan European Fund Fund 15 8 2002 Fund manager Léonard Vinville 9 4 11 11 9 9 Years at M&G 11 Average 7 2005 Dedicated analyst Daniel White 11 1999 Fund manager Richard Halle 11 1998 Fund manager Michael Stiasny 9 2000 Fund manager Charles Anniss 14 2001 Head of team Fund manager Giles Worthington Years of investment experience Joined M&G in Position Name
    • 50. Team bios M&G European Equities Source: M&G, March 2010 Leonard Vinville joined M&G in January 2002. He is a fund manager in the European equity team. responsible for the M&G Global Convertibles Fund. Leonard previously worked at AGF AM Asset Management (Allianz-Dresdner Group) in Paris where he was the co-head of French equities fund management and responsible for assets of €1.5 billion. Prior to this, he was a financial analyst with Bleu Nuit in Paris. Leonard gained a DEUG and CPEG (Diploma and Certificate of Management Graduate Studies) from the University of Paris in 1990 and completed a master in management in 1992. In 1994, he gained a DECF – Grand Oral of the Chartered Accountant Degree. He completed an MBA (majoring in finance) at the University of London in 1996. Léonard Vinville Daniel White joined M&G’s analyst team in 2005. He is a member of the European team, responsible for analysing pan-European companies. Daniel previously worked at Deloitte & Touche as an accountant. He graduated from the University of Southampton with a BSc in oceanography in 2001. In 2005, he qualified as a chartered accountant. Daniel White Richard Halle joined M&G in 1999 as an investment analyst specialising in the insurance sector. Since 2002, he has been a member of the European equities team and in 2008 he was appointed fund manager of the M&G European Strategic Value Fund and M&G Pan European Dividend Fund . Before joining M&G, Richard worked as a security analyst for the Sedgwick Group. Richard graduated from the University of Natal in South Africa with a bachelor of commerce and is a chartered financial analyst (CFA) charterholder. Richard Halle Michael Stiasny joined in 1998 as an equity analyst, becoming head of the pan-European equity research team in February 2005. He was appointed co-manager of the M&G European Fund in June 2007, becoming sole manager in February 2008. He also became manager of the M&G European Special Situations Fund on its launch in February 2008. Michael graduated in philosophy, politics and economics from Oxford University. He is also a CFA charterholder. Michael Stiasny Charles Anniss joined M&G in December 2000 as a member of the investment communications team and became an analyst on the equities team in October 2003, focusing on European smaller companies. He became co-manager of the M&G European Smaller Companies Fund with Giles Worthington in March 2006 and was appointed sole manager of the fund in January 2007. He graduated in French and Spanish from Bristol University and is a CFA charterholder. Charles Anniss Giles Worthington joined M&G in March 2001 as a fund manager on the European desk. He is head of the M&G European Equities team and fund manager of the M&G Pan European Fund. In 1995, Giles joined Invesco Fund Managers where he managed segregated European smaller companies funds and a global smaller companies fund. Prior to this, Giles worked for Simmons & Simmons, the law firm. Giles graduated from St Hugh’s College, Oxford, with a MA in modern history. Giles Worthington Bio Name
    • 51. Analyst team Sector specialists supporting fund managers Source: M&G as at 31 December 2009 2 1 2010 BSc (Bath) TMT Alexander, Rory Industrial & Energy Financials Financials Financials Consumer Industrial & Energy Industrial & Energy TMT TMT Consumer Financials Consumer Coverage 13 2 2008 BA (Oxford) Waight, Chantal 6 2 2008 AB (Princeton) Tiltman, Gillian 8 2 2008 MSc (UCL) Sohi, Jujhar 12 6 2004 MA (Oxford) Smith, Alistair 25 4 2005 BSc (Melbourne) Phillips, Graham 12 2 2007 BA (Cambridge), CFA Dattani, Upin 4 4 2006 BSc (Exeter) Brownsword, Ally 18 8 2002 PhD (LSE) Alexander, James BA (Oxford) MSc (LBS), CFA MSc (Warwick) MBA (Insead) Education 4 3 7 4 4 Years at M&G 10 Average 3 2009 Weavers, John 12 2003 Oza, Sachin 6 2005 Moore, Michael 4 2006 Ahuja, Anita Years of investment experience Joined M&G in NameB
    • 52. Equities Analyst team James Alexander Head of Equities Research team Jane Thompson Team co-ordinator Financials James Alexander (Head of Research) Banks Jujhar Sohi Speciality & Other Finance Chantal Waight Insurance Life Assurance Gillian Tiltman Real Estate Consumer Industrial & Energy TMT Alistair Smith General Retailers Consumer Staples Pharmaceuticals Leisure & Hotels - Pubs only Anita Ahuja Food & Drug Retailers Leisure & Hotels - except Pubs Healthcare Chemicals Health Ally Brownsword Food & Drug Retailers General Retailers Luxury Goods * Support Services Agri Chemicals (K&S, Yara, Syngenta) AN Other Graham Phillips Autos & Trucks Building, Construction, Contractors & Materials Aerospace & Defence Steel, Cement Paper & Packaging ** Support Services Sachin Oza Electricity (excl Iberia Utilities) Other Utilities (excl UK Water) Mining Oil & Gas John Weavers Industrial Chemicals UK Water Iberia Utilities Oil Services AN Other Upin Dattani Telecoms Rory Alexander Media & Entertainment Transport Mike Moore IT Hardware Rory Alexander Software & Computer Services Electronic & Electric Equip Electrical & Mechanical Engineering ** Support Services AN Other Source: M&G as at 6 January 2010
    • 53. This document is designed for investment professionals’ use only, not for onward distribution to any other person or entity. For Switzerland: Distribution of this document in or from Switzerland is not permissible with the exception of the distribution to qualified investors according to the Swiss Collective Investment Schemes Act, the Swiss Collective Investment Schemes Ordinance and the respective Circular issued by the Swiss supervisory authority (&quot;Qualified Investors&quot;). Supplied for the use by the initial recipient (provided it is a Qualified Investor) only. In Spain the Funds are registered for public distribution under Art. 15 of Act 35/2003 on Collective Investment Schemes as follows: Investment Funds (1) reg. no 390, Investment Funds (2) reg. no 601, Investment Funds (3) reg. no 391, Investment Funds (7) reg. no 522, Global Dividend Fund reg.no 713 and Optimal Income Fund reg. no 490. The collective investment schemes referred to in this document (the &quot;Schemes&quot;) are open-ended investment companies with variable capital, incorporated in England and Wales. This information is not an offer or solicitation of an offer for the purchase of investment shares in one of the Funds referred to herein. Purchases of a Fund should be based on the current prospectus. This prospectus, simplified prospectus, annual report and subsequent semi-annual report, are available free of charge, in paper form, from the ACD: M&G Securities Limited, Laurence Pountney Hill, London, EC4R 0HH, GB, or one of the following: M&G International Investments Ltd., Niederlassung Deutschland, Joachimstaler Straße 10-12, D-10719 Berlin, J.P. Morgan AG, Junghofstr 14, D-60311 Frankfurt am Main, M&G International Investments Ltd, Raiffeisen Zentralbank Österreich AG, Am Stadtpark 9, A-1030 Wien, J.P. Morgan Bank Luxembourg S.A., 5 Rue Plaetis, L-2338 Luxembourg, Allfunds Bank, C/Nuria, 57, Mirasierra, E-28034 Madrid, Cassa Centrale Raiffeisen dell'Alto Adige S.p.A, via Laurin I, I-39100 Bolzano, M&G International Investments Limited 90 avenue des Champs Elysées, 75008, Paris, France or from the French centralising agent of the Fund: RBC Dexia Investors Services Bank France, M&G International Investments Ltd., Stockerhof Dreikönigstrasse 31a, CH-8002, Zürich, Switzerland. Before subscribing you should read the prospectus, which includes investment risks relating to these funds. This financial promotion is published by M&G International Investments Ltd. (Registered Office: Laurence Pountney Hill, London EC4R OHH) authorised and regulated by the Financial Services Authority and registered with the CNMV in Spain.

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