M&G to transform £2.1bn Global Basics fund

Manufacturing-Plant-Factory-Industrial-700x450.jpg

M&G Investments is planning to drop the required sector allocation in its £2.1bn Global Basics fund as it eyes healthcare opportunities.

The fund currently requires 70 per cent allocation to basic industries, such as mining and manufacturing, but wants to open up the fund to other industries. It has returned 14.4 per cent over the last year compared to 16.3 per cent in the Global sector, FE data shows.

Pending shareholder approval, the fund would be rebranded as M&G Global Themes. The fund will also switch its benchmark to the MSCI All Country World Index, while its objective will shift from capital growth to total return.

Under the proposed new policies, the fund would be required to invest at least 80 per cent of its portfolio in global equities with no restriction on sector, size or geography.

Fund manager Jamie Horvat will combine top-down and bottom-up analysis, identifying themes from trends such as demographics, technological innovation and the environment.

“Over recent years trends within the global economy have evolved so the removal of the restriction to invest mainly in basic industries will enable us to widen the themes in the fund,” Horvat says “We are keen to capitalise on sectors and industries that benefit from increased demand for healthcare and medicines to support ageing populations, water and waste management, clean energy and cyber-security.”

The fund will also switch its benchmark to the MSCI All Country World Index, while its objective will shift from capital growth to total return.