M&G Investments is adding US dollar and Swiss franc share classes to a number of its fixedincome funds following demand from global distributors.
Head of global sales and managing director Jonathan Willcocks says the firm has applied for regulatory approval for the new share classes but he cannot reveal which funds are affected until the FSA has rubber-stamped the move.
M&G has a range of fixedincome offerings, including the £5.1bn corporate bond, £5.1bn optimal income and £3.8bn strategic corporate bond funds.
Willcocks says: “We are seeking approval to add US dollar and Swiss franc share classes to the fixed-income funds. This is owing to client demand from global distributors and will make our funds more relevant.
“Share classes outside sterling are more important in the fixed-income world than the equity world. Currency moves can significantly impact the returns on fixed-income products. With global equity, for example, currencies just wash through the fund and there is no benefit to hedging.”
Bestinvest senior analyst Ben Seager-Scott says: “UK-based IFA firms may have investors that live abroad and they may want a share class in a different currency. There would be an argument to use a hedged share class in fixedincome funds to take exposure to the underlying bonds without the currency risk.”