M&G (Lux) Conservative Allocation Fund


Price (07.12.2018)

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Objective and investment policy


The fund aims to provide a positive total return (combined income and capital growth) of 3-6% on average per year over any three-year period by investing in a mix of assets from anywhere in the world.

Investment policy and strategy

Core investment: The fund will typically invest within the following net allocation ranges:

• 0-100% in bonds

• 0-35% in company shares

• 0-20% in other assets (including convertibles and property-related securities)

The fund typically invests in the above assets via derivatives. The fund may also invest in assets directly or through other funds. The ranges shown above are on a net basis, that is, ‘long’ positions (investments that profit from a rise in asset prices) net of ‘short’ positions (investments held via derivatives that profit from a fall in asset prices). Using derivatives to invest also allows the fund to create ‘leverage’, meaning that the fund can gain exposure to investments that exceed its value, thus increasing potential returns (or losses) in both rising and falling markets.

In addition, derivatives are used to reduce risk and costs and to manage the impact of changes in currency exchange rates on the fund’s investments.

Other investment: The fund may also invest in currencies and hold cash, deposits and warrants.

Strategy in brief: The fund is managed with a highly flexible investment approach. The investment manager has the freedom to allocate capital between different types of assets in response to changes in economic conditions and asset prices. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of the market’s short-term reactions to events, to identify investment opportunities. The fund seeks to manage risk by investing globally across multiple asset classes, sectors, currencies and countries. Where the investment manager believes opportunities are limited to a few areas, the portfolio may be very concentrated in certain assets or markets. The investment manager will normally seek to hold at least 60% of the fund in euros.

Glossary terms

Bonds: Loans to governments and companies that pay interest.

Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.

Derivatives: Financial contracts whose value is derived from other assets.

Warrants: Financial contracts which allow the fund manager to buy stocks for a fixed price until a certain date.

Risks associated with the fund

The value of investments and the income from them will rise and fall. This will cause the fund price, as well as any income paid by the fund, to fall as well as rise. There is no guarantee the fund will achieve its objective, and you may not get back the amount you originally invested.

The fund may take short positions through the use of derivatives which are not backed by equivalent physical assets. Short positions reflect an investment view that the price of the underlying asset is expected to fall in value. Accordingly, if this view is incorrect and the asset rises in value, the short position will cause the Fund to incur a loss.

The value of the fund will fall if the issuer of a fixed income security held is unable to pay income payments or repay its debt (known as a default). Fixed income securities that pay a higher level of income usually have a lower credit rating because of the increased risk of default. The higher the rating the less likely it is that the issuer will default, but ratings are subject to change.

Changes in currency exchange rates will affect the value of your investment.

Hedged share classes aim to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders ofthe hedged share class from benefiting ifthe hedged share class currency falls against the euro.

The manager will place transactions (including derivative transactions), hold positions and place cash on deposit with a range of financial institutions. There is a risk that the financial institutions may fail to meet their obligations or become insolvent.



Fund Team

Juan Nevado

Juan Nevado - Fund manager

Juan Nevado joined PPM (now M&G) in 1988 and has been working as part of the Multi Asset team led by Dave Fishwick since 1999. He is co-fund manager of the M&G (Lux) Conservative Allocation Fund and the M&G (Lux) Dynamic Allocation Fund (and held the same positions on the UK-authorised UCITS which merged into these funds on 16 March 2018). Since January 2011 he has been co-fund manager of the M&G Episode Allocation Fund, a UK-authorised UCITS. Prior to joining M&G, Juan worked as a bond economist at the Bank of Montreal, and before that, as an economist for the Commodities Research Unit, a private business consultancy specialising in macro/micro research on commodities markets. Juan has a BSc in economics from the LSE and an MA in economics from Warwick University.

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Craig Moran

Craig Moran - Co-manager

Craig Moran was appointed co-manager of the M&G Prudent Allocation Fund on launch in April 2015. He has also been deputy fund manager on the M&G Managed Growth Fund since 2013 and on the M&G Episode Allocation Fund and the M&G Dynamic Allocation Fund since 2011. Craig joined M&G in 2005 as a performance and risk analyst and was later promoted as a fund managers' assistant to the Multi Asset team. In 2010, he became the team's investment analyst. Craig holds a bachelor of business degree from Queensland University of Technology and a masters in applied finance and investments from the Financial Services Institute of Australasia. He is a CFA charterholder.

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Susanne Grabinger

Susanne Grabinger - Investment specialist

Susanne Grabinger joined M&G in 2010 and is currently an investment specialist providing support for M&G's multi-asset fund range and the M&G Global Convertibles Fund. Prior to joining M&G, Susanne worked at JPMorgan Asset Management as a client portfolio manager, focusing on institutional equity accounts and balanced mutual funds. She holds a master’s degree in business administration from the University of Bamberg, Germany, and is a CFA charterholder. Susanne is fluent in German and English and is also proficient in French and Spanish.

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Ana Cuddeford

Ana Cuddeford - Investment specialist

Ana Cuddeford is the investment specialist covering M&G’s multi-asset fund range and the M&G Global Convertibles Fund. She initially joined M&G in December 2013 from FTSE Group, where she had helped execute their FTSE4 Good company engagement. Prior to that, Ana spent 16 years in equity sales, the last 11 of which were at financial group Citi. She is fluent in English, Spanish and Italian and has a good command of French. Ana graduated from the University of Wales, College of Cardiff with a BSc (Hons) in European community studies.

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Christophe Machu

Christophe Machu - Investment specialist

Christophe Machu joined the Multi Asset and Convertibles teams as an associate investment specialist providing support for M&G's multi-asset fund range and the M&G Global Convertibles Fund in September 2014. He initially joined M&G in 2012 as a sales support in Paris before moving into the International Marketing team in London. Christophe has an MSc in risk and finance from EDHEC Business School.

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Graziano Creperio - Investment specialist

Graziano Creperio joined the M&G Multi Asset team as an associate investment specialist providing support for the M&G multi-asset funds. He initially joined M&G in 2012 as a fund data analyst and was later promoted to senior data specialist. Prior to joining M&G, Graziano worked as a portfolio data analyst at Morningstar. He holds a MSc in management and a BA in economics from Bocconi University in Milan. He also studied at Babson College in Boston and Jiao Tong University in Shanghai.

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Rating is at a share class level

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The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.