Best In Class  

Best in class: M&G Episode Income

“The market is beating us up here but what’s changed in fact rather than emotion? If markets are offering us a heavily discounted asset, like equity, because of the fear of some unknown future, then we should be taking that on,” he says (quoted in FundCalibre in June 2019).

The fund is targeting a sustainable income over a multi-year period.

Mr Andrew achieves this by making asset allocation decisions at the portfolio level which make money, but also builds a portfolio of assets that steadily increases the income.

The fund’s diversification is highlighted in the bond quota - where it holds the likes of US treasuries as a risk-off safety asset, and a diversifying asset for equities.

The less mainstream government bond assets in overseas regions tend to have a shorter-term maturity, but are higher yielding - as well offering currency diversification and income.

In addition to equities (48.2 per cent) and bonds (40 per cent) the fund also has a small allocation to property (2.9 per cent), through the M&G Property fund.

The fund is top quartile over one, three- and five-year periods in the Investment Association Mixed Investment 20 per cent to 60 per cent shares sector.

Over the five-year time frame it has returned 35.5 per cent, compared with a sector average of 25.1 per cent.

It has an historic yield of 2.71 per cent and an ongoing charge of 0.8 per cent.

This is a unique multi-asset, income-orientated fund.

It has demonstrated its process works, while the frequency of income and relatively low volatility makes it a great option for those looking for a low risk income option.