M&G Global Basics Fund

A route to access the opportunities in today's emerging markets.

Although the downturn has affected many countries worldwide, demand for ‘basic’ goods and services, fundamental to infrastructure development, energy provision and key to meeting rising living standards, has remained resilient. This demand has been fuelled largely 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 – from the producers and processors of raw materials, to the deliverers of consumer goods. These are the companies that fund manager Graham French believes drive economic growth worldwide. This fund, therefore, should appeal to investors wanting to profit from the world’s growth markets by investing in companies operating in them or with businesses driven by demand from these regions.

Investment strategy 

Fund objective and policy

The curve of global economic development

About the fund manager

Why choose the M&G Global Basics Fund?

How has the M&G Global Basics Fund performed?

Investment strategy

Citywire A* rated fund manager Graham French invests in companies operating in basic industries, offering a diversified portfolio of consumer staples and commodities from around the globe, which he believes are well placed to capitalise on the strength of emerging international markets. However he tends to invest in companies that are based in developed markets, as they typically involve less volatility and risk.

He seeks out companies that are ideally positioned along the ‘curve of global economic development’ (as shown below). 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.

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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.

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Fund objective & policy

The Fund is a global equity fund which invests wholly or mainly in companies operating in basic industries (‘primary’ and ‘secondary’ industries) and also in companies that service these industries. The Fund may also invest in other global equities. The Fund’s sole aim is long-term capital growth.

Products available: ISA, OEIC & Savings Plan

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About the fund manager

Citywire A* rated Graham French joined M&G in 1989 as a graduate from Durham University where he studied geography. His fund management responsibilities include managing the M&G Global Basics Fund and the M&G Managed Growth Fund and co-managing the Vanguard Precious Metals & Mining Fund. Graham French was instrumental in the design and development of the investment strategy of the M&G Global Basics Fund and has managed the fund since its launch in November 2000**.

In addition to the fund data that can be found by accessing the menu to the left of this page you may also wish to read the fund Key Features (3 MB) which contains further fund information.

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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 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.
• 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.

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How has the M&G Global Basics Fund performed?

• The M&G Global Basics Fund has achieved a return of 61.5% over five years, outperforming its sector, the IMA Global Growth Sector, by 32.3%.
• The fund has achieved a return of 195.3% since launch in November 2000**, outperforming the sector by 167.5%.

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 30 July 2010.

*Citywire rating as at 31 July 2010. 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.

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