M&G Global Basics Fund

New growth from all around the world

Although many countries around the world have been suffering from the economic downturn, demand for ‘basic’ goods and services, fundamental to infrastructure development and energy provision, and to meet rising living standards, has remained resilient. This demand has been fuelled mostly by emerging markets, particularly China and India.

The M&G Global Basics Fund aims to achieve long-term capital growth by investing in companies involved in these ‘basic’ industries – for example through the production or processing of raw materials, or delivery of consumer goods. These are the companies that Citywire AA* rated fund manager Graham French believes drive economic growth worldwide. 

Graham aims to invest in companies operating in, or with business driven by demand from these regions. He generally invests in companies listed in developed markets – usually associated with lower levels of volatility and risk. Graham seeks out companies that are ideally positioned along the ‘curve of global economic development’. These companies provide goods and services that are rarely out of demand. The flexibility of the fund has allowed Graham to achieve an excellent long-term record.  

Harnessing the world’s potential: the curve of global economic development

Emerging consumers underpinning demand 

• As countries become more sophisticated, they tend to move up what we term the curve of global economic development as their needs change and expand, moving from a demand for raw materials to increasing use of travel and consumption of branded goods.
• This emergence of new consumers in developing markets is creating continuing strong real demand for a variety of goods and services.      

Why choose the M&G Global Basics Fund?

• The fund aims to provide returns by accessing the long-term growth of emerging countries through investments in companies listed in developed markets.
• It invests in companies involved in basic industries which provide the materials, goods and services that the world’s consumers demand – the ‘building blocks’ of the global economy.
• The fund is the best performing fund in its sector, the IMA Global Growth Sector, over 6, 7, 8 and 9 years and since its launch in November 2000. It is also ranked in the sector’s top 10% over 1, 3, and 5 years, and top 25% over 2 years.
• Fund manager Graham French looks to identify and exploit economic trends that will be key long-term drivers of growth, rather than relying on short-term ‘market noise’ that can distract from the long-term case for a stock.
• Graham seeks to invest in well-financed companies with strong cash generation and which have identifiable and comprehensible business models.

Back to top

How has the M&G Global Basics Fund performed?

• The M&G Global Basics Fund has achieved a return of 94.2% over five years, outperforming its sector, the IMA Global Growth Sector, by 40.2%.
• Since the fund was launched in November 2000**, the fund has achieved a return of 189.3%, outperforming the sector by 164.0%.

Please remember that you should not base decisions on past performance, prices may fluctuate and you may not get back your original investment. Overseas shares may be affected by currency exchange rates.

Source of all performance figures: Morningstar Inc., and M&G Statistics, bid to bid, net income reinvested, Sterling Class A Shares as at 31 December 2009.

*Citywire rating as at 31 December 2009. Ratings should not be taken as a recommendation.

** The fund originally launched on 28 February 1973 (end of the initial offer period of the Fund in the UK). However, on 17 November 2000, the fund re-launched and we are choosing to use this date as the launch date for this fund. On that date the fund’s name, objective, benchmark and sector changed.