The information in this site is intended for authorised charities in the United Kingdom only. 

The website is operated by M&G Securities Limited on behalf of itself, Charities Investment Managers Limited and the Trustees of Charibond. M&G Securities Limited is the managing agent for Charities Investment Managers Limited and the fund manager of Charibond.

The information provided is directed at authorised charities in the United Kingdom and is not to be regarded as an offer to buy or sell, securities or investments. Charibond is available for investment by registered charities in the United Kingdom allowed to invest in common investment funds.

Please click the appropriate button to the right to confirm that you are an authorised charity and wish to continue.

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Audience

Fixed interest

Fixed interest securities, also known as bonds, are loans, usually taken out by a government or company which normally pay a fixed rate of interest over a given time period, at the end of which the loan is repaid. They can offer a more predictable income for investors when compared to riskier asset classes, such as equities, and help to bring an important element of diversification to your charity's investment portfolio.

Contact our Charities team

Email us: charities@mandg.co.uk

General enquiries: 0800 917 4472

Richard Macey
Director of Charities

Tel: 020 7548 3731

Go to our contacts page

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.

When you buy a bond, you’re effectively extending a loan to the bond issuer. Bonds can be issued by governments or companies. Government bonds are generally issued to fund public spending on projects like new roads and schools, while a company may issue corporate bonds as a way of financing new business opportunities.

How they work

As a bond investor, your charity receives an income through regular interest payments from the bond issuer. These payments are known as the ‘coupon’. The coupon amount is agreed when the bond is first issued and won’t usually change.

On the day that the bond expires, known as the ‘redemption’ or ‘maturity’ date, your charity will usually get back it's original investment. After buying a bond, you don’t have to hold onto it until the redemption date. Just as a company’s shares can be bought and sold on the stockmarket, bonds can also be traded throughout their lifetime.

The amount borrowed by the issuer that must be repaid to the holder of the bond is known as the principal.  This is also known as 'face value' or 'par value' and is set when the bond is issued.  Between the date of issue and the maturity date, the price will change as the bond is bought and sold on the open market.

Why invest in a bond fund?

Because investments in bonds offer regular coupon payments, they often appeal to investors looking for a regular income stream. Because the prices of bonds tend to move less sharply than equities, they are sometimes regarded as a safer haven from market turbulence. Like all investments, however, bonds are not risk-free - the price of bonds is generally affected by changes in interest rates and inflation, and because they are debt instruments there is a risk that an issuer might run into financial difficulties and fail to meet these obligations, which is called a ‘default’. The likelihood of this happening will depend on the financial strength of the issuer.

When you invest in a bond fund, your charity's money is pooled with other investors’ money and invested in a wide range of individual bonds with different coupons and maturity dates according to the investment parameters of the fund. This diversification helps to reduce your charity's investment risk as you aren’t reliant on the fortunes of a single company or government.

Because bond funds invest in a number of different bonds - all with different coupons and maturity dates - they can’t promise a fixed return and so instead aim for a target return. If you invest in a bond fund the income your charity receives is called the ‘yield’. The ‘distribution yield’ gives an indication of the amount of income that is expected to be distributed over the next 12 months, expressed as a percentage of the current fund price less fees and charges.

Experienced at leading the way in bonds

M&G launched the UK’s first corporate bond fund in 1994 and we’ve been at the forefront of innovation in the bond market ever since. Today M&G is one of Europe’s largest bond fund managers, with £165bn* of fixed interest assets under management.

The M&G Retail Fixed Interest Team’s ability to make the right calls in a variety of conditions has been proven time and time again. Decisions such as being underweight in banks ahead of the credit crunch and minimising exposure to peripheral eurozone countries before the European debt crisis have kept M&G a step ahead of the competition.

M&G offers funds investing across the whole spectrum of bond investments. When your charity invests in an M&G bond fund, it's money is pooled with other investors' money and invested in a wide range of bonds. The risk of investing in the bond market is therefore reduced because your charity's investment is spread over a number of companies and/or governments.

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. Past performance is not a guide to future performance. Bond funds provide a variable level of income.

*Source: M&G statistics as at 30 June 2016

Offering you a more secure long-term investment

For an investment that generally offers you more security than equities, take a look at bonds.

Corporate bonds (issued by companies) generally pay higher interest coupons than government bonds. This is because they’re considered more vulnerable to credit risk (the risk that a financial obligation will not be paid and a loss will result for the lender), the level of which will depend on the performance of the company.

M&G offers funds investing across the whole spectrum of bond investments. When you invest in an M&G bond fund, your charity's money is pooled with other investors' money and invested in a wide range of bonds. The risk of investing in the bond market is therefore reduced because your charity's investment is spread over a number of companies and/or governments.

Past performance is not a guide to future performance. Prices may fluctuate and you may not get back your original investment. Bond funds provide a variable level of income.

Fixed interest funds for charities

Charibond

Optimal Income Fund

Strategic Corporate Bond Fund

Contact the M&G Charities team if you’d like to learn more about other available funds.

We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.

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