M&G (Lux) Euro Corporate Bond FundEuro Class A – Accumulation sharesMonthly Fund Review as at 29 February 2020For investment professionals only

Highlights• Credit spreads widened while core government bond yields fell as risk-taking declined.• Despite a very challenging final week, euro investment grade markets held up relatively well over the course of the month.• Our underweight positions in banking, basic industrials, and automobiles, aided fund performance, even though overallreturns were negative, in line with its benchmark.• We remain short of BBB rated corporate bonds on valuation grounds.

Annual performance (%)

0.5

5.0

-2.6

3.24.4

-1.4

0.8

-6.0-4.0-2.00.02.04.06.08.0

YTD 2019 2018 2017 2016 2015

Fund Benchmark

Performance over 5 years

94.0

97.0

100.0

103.0

106.0

109.0

112.0

115.0

Inde

xed

to 1

00

Feb 15 Dec 15 Dec 16 Dec 17 Dec 18 Feb 20

Euro A Accumulation (109.1) ICE BofA Merrill Lynch Euro Corporate Index (113.1)

Fund performance

1 month (%) 3 months (%) YTD (%) 1 year (%) 3 years (%)p.a.

5 years (%)p.a.

Euro A Accumulation -0.4% 0.4% 0.5% 3.6% 1.8% 1.4% ICE BofA Merrill Lynch

Euro Corporate Index-0.4% 0.7% 0.8% 5.2% 2.5% 2.2%

Past performance is not a guide to future performance.The benchmark is a comparator against which the fund’s performance can be measured. The index has beenchosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark is used solely to measure the fund’s performance and doesnot constrain the fund's portfolio construction.

The fund is actively managed. The investment manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The fund’s holdingsmay deviate significantly from the benchmark’s constituents.Fund performance prior to 9 November 2018 is that of the EUR Class A Accumulation of the M&GEuropean Corporate Bond Fund (a UK-authorised OEIC), which merged into this fund on 7 December 2018. Tax rates and charges may differ.

Source: Morningstar, Inc and M&G, as at 29 February 2020. Returns are calculated on a price to price basis with income reinvested.Benchmark returns stated in EUR terms. Benchmark performance is shown from the start of manager's tenure of the OEIC, which was 30 March 2007.

Performance charts © 2020 Morningstar Inc., All Rights Reserved. The information contained within: (1) is proprietary to Morningstar and/or its content providers;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for anydamages or losses arising from any use of this information.

Key informationFund manager Stefan IsaacsFund manager tenure from 30 March 2007Deputy fund manager Wolfgang BauerISIN LU1670629549Launch date of fund 09 November 2018Launch of share class 09 November 2018Fund size (millions) € 914.32Fund type SICAVBenchmark ICE BofA Merrill Lynch Euro Corporate IndexSector Morningstar EUR Corporate Bond sectorNumber of issuers 151Average credit rating A-Modified duration (years) 4.81VaR 1.16%Average coupon 2.05Spread duration (years) 5.5

‘Manager tenure’ includes the period when managing an equivalent UK-authorised OEIC. Please see ‘Importantinformation’ at the end of this document for further details.

ChargesMaximum entry charge 3.25%Ongoing charge 1.21%

Things you should knowThe fund allows for the extensive use of derivatives.

Fund ratingsMorningstar Analyst rating

Overall Morningstar rating QQQSource of Morningstar ratings: Morningstar, as at 29 February 2020

Ratings should not be taken as a recommendation.

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Asset breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetGovernment bonds 5.7 0.0 0.0 5.7Investment grade corporate bonds 85.8 0.0 0.0 85.8Fixed rate 72.1 0.0 0.0 72.1Floating rate 13.7 0.0 0.0 13.7Index linked 0.0 0.0 0.0 0.0Credit default swap indices 0.0 0.0 0.0 0.0High yield corporate bonds 6.5 0.0 0.0 6.5Fixed rate 2.6 0.0 0.0 2.6Floating rate 3.9 0.0 0.0 3.9Index linked 0.0 0.0 0.0 0.0Credit default swap indices 0.0 0.0 0.0 0.0Securitised 1.4 0.0 0.0 1.4Equities 0.0 0.0 0.0 0.0Other 0.0 0.0 0.0 0.0Cash 0.6 0.0 0.0 0.6

Credit rating breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetAAA 9.5 0.0 0.0 9.5AA 7.6 0.0 0.0 7.6A 32.9 0.0 0.0 32.9BBB 43.0 0.0 0.0 43.0BB 6.0 0.0 0.0 6.0B 0.5 0.0 0.0 0.5CCC 0.0 0.0 0.0 0.0CC 0.0 0.0 0.0 0.0C 0.0 0.0 0.0 0.0D 0.0 0.0 0.0 0.0No rating 0.0 0.0 0.0 0.0Cash 0.6 0.0 0.0 0.6

Country breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetUS 26.5 0.0 0.0 26.5France 16.4 0.0 0.0 16.4UK 13.3 0.0 0.0 13.3Germany 10.0 0.0 0.0 10.0Switzerland 6.8 0.0 0.0 6.8Netherlands 5.8 0.0 0.0 5.8Spain 4.4 0.0 0.0 4.4Italy 3.5 0.0 0.0 3.5Other 12.7 0.0 0.0 12.7Cash 0.6 0.0 0.0 0.6

Largest issuers (excluding government bondsand CDS indices, %)

FundEngie 2.2JP Morgan 1.9Novartis Finance 1.8Johnson & Johnson 1.8HSBC 1.6Vodafone Group 1.6Wells Fargo & Company 1.6Intesa Sanpaolo 1.5Shell International Finance 1.5Lloyds Banking Group 1.4

Maturity breakdown (%)Physical

0 - 1 years 5.01 - 3 years 16.43 - 5 years 26.25 - 7 years 26.87 - 10 years 17.010 - 15 years 3.415+ years 4.7Cash 0.6

Currency breakdown (%)Pre-hedge Post-hedge

Euro 95.8 100.0British pound 2.0 0.0US dollar 2.2 0.0

Industry breakdown (%)

PhysicalShort

(via CDS)Long

(via CDS) NetBanking 25.2 0.0 0.0 25.2Telecommunications 9.0 0.0 0.0 9.0Insurance 7.3 0.0 0.0 7.3Energy 6.4 0.0 0.0 6.4Consumer goods 5.9 0.0 0.0 5.9Sovereign 5.7 0.0 0.0 5.7Utility 5.5 0.0 0.0 5.5Healthcare 5.4 0.0 0.0 5.4Automotive 4.5 0.0 0.0 4.5Capital goods 4.0 0.0 0.0 4.0Real Estate 3.6 0.0 0.0 3.6Technology & electronics 2.8 0.0 0.0 2.8Financial services 2.8 0.0 0.0 2.8Asset backed 2.7 0.0 0.0 2.7Retail 1.9 0.0 0.0 1.9Services 1.8 0.0 0.0 1.8Covered Bonds 1.8 0.0 0.0 1.8Transportation 1.3 0.0 0.0 1.3Basic industry 1.0 0.0 0.0 1.0Media 0.6 0.0 0.0 0.6Agency 0.4 0.0 0.0 0.4Mortgage backed 0.0 0.0 0.0 0.0Cash 0.6 0.0 0.0 0.6

Duration by currency and asset classFund Futures Swaps Net

Euro 5.0 -0.2 0.0 4.8British pound 0.1 -0.1 0.0 0.0US dollar 0.2 -0.2 0.0 0.0Other 0.0 0.0 0.0 0.0Total 5.3 -0.5 0.0 4.8

CommentaryFebruary began on a mildly positive note, as credit spreads tightened and the primary market remained fairly active. But as coronavirus casesspread across Europe, ‘risk-off’ sentiment returned to markets with a vengeance. With a significant widening in credit spreads, the last week ofFebruary was the worst for many markets since the global financial crisis.Any hopes at the start of the month that coronavirus would be a temporary issue were short-lived: at the beginning of February, there were132 cases identified outside of China, and those mainly in Asia; there were more than 4,600 cases by the end of the month.Equity and credit markets suffered, with the S&P 500 experiencing its largest weekly decline since October 2008. European markets – Greece’sAthex lost a fifth of its value in the month – also lagged as eurozone GDP data covering the final quarter of 2019 showed a mere 0.1%improvement.Certain safe-haven assets rallied. The Japanese yen was one of the top performers in February, up 3.2% versus the US dollar. In governmentbonds, US Treasuries gained 2.7% (with 10-year yields closing at record lows on Friday 28 February), UK gilts 1.2% and German bunds 1.4%.Italian BTPs lost 1.2%, with Italy at the centre of the European outbreak. Surprisingly, gold’s allure dulled as the month progressed, as did oil’s,with Brent crude down sharply in February. One of the weakest performers during the month was sterling, down 2.9% versus the US dollar.The fund generated a small negative return in a period when the performance of the asset class was either flat – as in the case of high-qualitypaper (AAA) – or slightly negative for lower quality names (BBBs).The fund did benefit from being overweight credit duration compared to strategies with less credit risk, and by having a greater bias to AAArated bonds. Equally, there was a small boost to returns from stock selection – driven by underweights in banking, basic industry andautomobiles. We remain underweight BBBs on valuation grounds and their recent underperformance compared to higher-quality debt couldcontinue should the risk-off environment persist.

Key changesFollowing a very active first month of 2020 for trading in both the primary and secondary bond markets, February was quieter for trades. Asvolatility increased and credit spreads widened – stemming from investors fretting over a rise in the number of coronavirus cases – we tookthe opportunity to add more longer-dated corporate bonds and mainly during the major asset repricing on 28 February.The fund’s duration in February, at 4.8 years, was around 0.4 years short against the benchmark ICE BofA Merrill Lynch Euro Corporate Index.Spread duration, at around 5.5 years, is around 0.2 years long – versus 0.6 years long this time last year – so the fund remains potentiallymore sensitive to a scenario of widening credit spreads in the coming months.

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Fund codes and charges

Share class ISIN Bloomberg CurrencyLaunch date of

fundOngoing

chargeDistribution

yieldUnderlying

yield

Minimuminitial

investment

Minimumtop up

investmentEuro A Acc LU1670629549 MGECEAA LX EUR 09/11/2018 1.21% - 0.12% €1,000 €75Euro A Inc LU1670629622 MGECEAD LX EUR 09/11/2018 1.21% 1.33% 0.12% €1,000 €75Euro C Acc LU1670629895 MGECECA LX EUR 09/11/2018 0.71% - 0.62% €500,000 €50,000Euro C Inc LU1670629978 MGECECD LX EUR 09/11/2018 0.71% 1.33% 0.62% €500,000 €50,000Euro CI Acc LU1797809503 MGCECIA LX EUR 19/11/2018 0.67% - 0.66% €500,000 €50,000Euro CI Inc LU1945295621 MGCECID LX EUR 22/02/2019 0.67% - - €500,000 €50,000

The ongoing charge figures disclosed above include direct costs to the fund, such as the annual management charge (AMC), administration charge and custodian charge, but do not include portfolio transaction costs. They are based on expenses for the period ending 30 September 2019.Any ongoing charge figure with * indicates an estimate. The fund's annual report for each financial year will include details of the exact charges.

Please note that not all of the share classes listed above might be available in your country.Please see the Important Information for Investors document and the relevant Key Investor Information Document for more information on the risks associated with this fund and which share classes are available for which product and which investor type.

Important informationOn 9 November 2018, the non-sterling assets of the M&G European Corporate Bond Fund, a UK-authorised OEIC, merged into the M&G (Lux) European Corporate Bond Fund, a Luxembourg-authorised SICAV, which launched on 9 November 2018. The SICAV is run by thesame fund manager, applying the same investment strategy, as the UK-authorised OEIC.

The M&G (Lux) Euro Corporate Bond Fund is a sub-fund of M&G (Lux) Investment Funds 1.

The Morningstar Analyst Rating™. © 2020 Morningstar. All Rights Reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings should not be taken as recommendation.

The Morningstar Overall Rating based on the fund’s Euro Class A shares. Copyright © 2020 Morningstar UK Limited. All Rights Reserved. Ratings should not be taken as recommendation.

Where a security has not been rated by Standard & Poor’s, Fitch or Moody’s, we may use M&G’s internal credit rating. Based on a comparison of all available ratings for each security, the most conservative rating (S&P, Fitch, Moody’s or M&G’s internal rating) is taken into consideration.The ratings so identified are then expressed or converted into M&G’s ratings format to obtain uniform information for all securities in the portfolio.

For Investment Professionals, Institutional Investors, Accredited Investors and Professional Investors only. Not for onward distribution. No other persons should rely on any information contained within.In Hong Kong, this financial promotion is issued by M&G Investments (Hong Kong) Limited. Office: Unit 1002, LHT Tower, 31 Queen’s Road Central, Hong Kong; in Singapore by M&G Investments (Singapore) Pte. Ltd. (Co. Reg. No. 201131425R), regulated by the Monetary Authority ofSingapore; and in Taiwan by M&G International Investments S.A. Registered Office: 16, boulevard Royal, L‑2449, Luxembourg.For Hong Kong only: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer of any funds mentioned in it. If you are in any doubt about any of the contents of this document, you shouldobtain independent professional advice. Shares, units or other interests in the funds mentioned in this document may only be offered or sold in Hong Kong to persons who are “professional investors” as defined in the Securities and Futures Ordinance (“Ordinance”) and any rules madeunder the Ordinance – or in circumstances which are permitted under the Companies (Winding Up and Miscellaneous Provisions) Ordinance. In addition, distribution of this document in Hong Kong is restricted. It may not be issued or possessed for the purposes of issue, whether in HongKong or elsewhere, and shares, units or other interests in the funds mentioned may not be disposed of to any person unless such person is a “professional investor” as defined in the Ordinance and any rules made under the Ordinance or as otherwise may be permitted under Hong Konglaw.For Singapore only: For “accredited investors” and “institutional investors” as defined under the Securities and Futures Act (Cap. 289) of Singapore (“SFA”) only. This document forms part of, and should be read in conjunction with, the Information Memorandum of the Fund and othercommunications permitted for offers made in reliance of prospectus exemptions under the SFA. All forms of investments carry risks. Such investments may not be suitable for everyone.For Taiwan only: The financial product(s) offered herein has not been reviewed or approved by the competent authorities and is not subject to any filing or reporting requirement. The financial product(s) offered herein is only permitted to be recommended or introduced to or purchased bycustomers of an offshore banking unit of a bank (“OBU”)/offshore securities unit of a securities firm (“OSU”) which customers reside outside the R.O.C. Customers of an OBU/OSU are not eligible to use the financial consumer dispute resolution mechanism under the Financial ConsumerProtection Law. This product(s) may be made available for purchase by Taiwan OBUs/OSUs acting on behalf of non-Taiwan customers of such units but may not otherwise be offered or sold in Taiwan.M&G Investments (Hong Kong) Limited, M&G International Investments S.A., M&G Investments (Singapore) Pte. Ltd and the funds referred to in this document may not be authorised, recognised or regulated by the local regulator in your jurisdiction. This information is not an offer orsolicitation of an offer for the purchase or sale of investment shares in one of the funds referred to herein.

Contact M&GAsia / Global Bankshttp://www.mandg.com/international/

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