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Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by M&G Credit Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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M&G Credit Income (LON:MGCI) offers a high income linked to interest rates from a diverse fixed-income portfolio. By investing in private debt markets as well as in specialist public debt sectors, a high income can be generated without taking on high-yield level credit risk. Additionally, duration is kept low, with the majority of the portfolio being floating rate, which means the value of the portfolio shouldn’t fall as much when rates rise as a traditional fixed income fund’s does (see Performance).

MGCI is managed by Adam English at M&G. M&G is a fixed-income specialist, with many decades of experience investing in public and private debt for institutional clients (mainly pension funds and insurers). M&G has over a hundred analysts spread across public and private debt markets, and Adam can allocate across the broad universe they cover, offering shareholders access to markets typically only available to professional investors.

Currently, 76% of the portfolio is investment-grade quality, and on a sector basis, it is defensively positioned. Despite this, a high Dividend yield is on offer. The dividend target is SONIA plus 4% over the course of a year. With SONIA averaging 3.73% over the first quarter of the year, and the possibility of further rate hikes to come, a highly attractive income is on offer, albeit with some variability. This income rose substantially over 2022 as interest rates were hiked and SONIA rose.

Analyst's View

We think MGCI is a highly attractive way to generate a high income in the current environment. The yield is substantial from a portfolio with low duration and low credit risk, the two key risks taken in traditional fixed income. In our view, equity and bond markets have priced in a relatively “soft landing”, in which inflation falls quickly and interest rates are cut. While MGCI is not actively positioned for one macro outcome or another, we think it offers valuable protection against a harder landing scenario. Additionally, whatever ‘landing’ occurs, the trust pays a high income in the interim which we think is attractive given the risks to capital in volatile markets. Thanks to the structure of the product, Adam has been able to take a defensive position while still generating a high dividend yield.

It is true that a softer landing would not be the best environment for MGCI. If rates are cut, MGCI will not experience capital returns as good as traditional fixed income, and the yields earned on the portfolio will fall. However, yields available would also fall on traditional fixed income, and in a lower rate environment, SONIA plus 4% would still reflect an attractive return over cash. Additionally, we note Adam has a highly flexible mandate which allows him to take advantage of pricing opportunities in multiple sectors to help boost the income and also offers some capital gains potential, even if this is not an investment objective.


  • High yield linked to interest rates with average investment-grade quality credit
  • Offers access to private debt markets, providing attractive risk/return characteristics and diversification
  • NAV should prove resilient due to many defensive characteristics


  • Complexity makes it harder for investors to understand exposures
  • Limited capital gain potential
  • High-yield bond funds may yield more at times
Continue to Portfolio

Fund History

27 Sep 2023 Fund Analysis
MGCI offers an exceptional yield from a portfolio with low NAV volatility…
24 May 2023 Five alternatives for income investors
Watch the presentations from our event focused on trusts delivering income via a diverse range of strategies…
04 May 2023 Fund Analysis
MGCI is generating a highly attractive yield from a relatively low-risk portfolio…
15 May 2023 M&G Credit Income
Adam English
Rewatch this webinar from our online series in May 'Alternatives for income investors' hosted by the team at Kepler Trust Intelligence 15-19 May…
Watch Recording
16 Nov 2022 Bottom fishing
What can history tell investors about calling the bottom of a market?
19 Oct 2022 Gimme shelter
Our analysts examine safe havens and defensive strategies as we endure the market's 19th Nervous Breakdown...
27 Sep 2022 Fund Analysis
MGCI’s floating rate exposure means its yield should rise as interest rates do…
31 May 2022 Five alternative trusts for income investors
Slides and audio from our event last week, featuring five trust managers discussing different strategies to deliver income for shareholders in challenging market conditions...
27 May 2022 Slides and Audio: M&G Credit Income
Download the presentation and listen to the audio from our 'Alternatives for income investors' virtual week from 23 May...
29 Apr 2022 Five trusts to diversify your portfolio income
Join us next week for one live webinar with a different manager every day of the week – including the chance to ask questions - focused on different solutions for those seeking a decent income…
22 Apr 2022 Bonds are back
BIPS and MGCI may benefit from higher interest rates…
13 Apr 2022 Fund Analysis
MGCI’s floating rate exposure means its yield should rise as interest rates do…
06 Apr 2022 Private markets: A closer look at the expanding private debt opportunity
We look at the attractions of the private debt market, historically the hunting ground of the institutional investor…
19 May 2021 The complexity premium
We examine the idea that extra returns can be obtained from buying investments which are perceived to be more complex by most investors...
12 May 2021 Riders on the storm
We look at the yields in the alternatives space and how they have been affected by the pandemic…
26 Mar 2021 Fund Analysis
MGCI offers a high yield with low asset value volatility, low duration and an investment grade rating…
06 Mar 2019 Stairway to heaven
Our research shows that reinvesting the income generated by alternative assets could add a significant boost to long-term portfolio performance…
05 Mar 2019 Fund Analysis
M&G Credit Income Investment Trust launched in November 2018 and targets a dividend yield of LIBOR plus 4% per annum...
24 Oct 2018 Fund Analysis
An opportunity to invest in sectors usually restricted to institutional investors with a target LIBOR plus 4% dividend...
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