POOLED PENSIONS Fund factsheet - M&G …

1 Fund descriptionThe investment strategy of the fund is to purchase units in theM&G Total return Credit investment Fund. That fund aims to maximisetotal return principally through prudent investment management. Itaims to provide investors with attractive returns from capital and incomefrom a diversified pool of debt and debt like assets, including but notlimited to, debt instruments with a fixed, variable or floating ratecoupon. The fund will identify opportunities at the market, sector, issueror security level. There is no geographic limitation to the factsStyleActive Multi-Asset CreditFund managerRichard RyanComparator1 Month LiborNumber of holdings422 Fund size bid/offer price AMC annual management charge; OCE other charges and change in offer price (net of fees)12 months to end ofDecember2018 2017 2016 2015 yr 3 yrs* 5 yrs* * AnnualisedFund launched on performance is not a guide to future performance.

2 The value ofinvestments, and the income from them, will fluctuate. This will cause thefund price to fall as well as rise and you may not get back the originalamount you and attribution The final quarter of the year saw stock and bond markets fall precipitouslyas investors weighed heightened economic and political risks. Equityindices suffered substantial declines, with most major indices falling bymore than 10% during the period. Credit markets followed suit withsharply wider spreads leading. Government bonds bucked the trend withyields falling as investors readjusted their expectations of tighter monetarypolicy and sought the safety of the risk free asset.

3 Weakness in the high yield sector was more marked, with credit spreadsmoving substantially wider overall, causing sub- investment grade indicesto decline significantly during the period. The Federal Reserve (Fed) raised US interest rates again, taking the FedFunds rate to Economic data releases continued to show the USeconomy in a positive light, with industrial production growth of 4% year-on-year and capacity utilisation near cyclical highs. However, forward-looking indicators suggest the outlook may be less robust, and the USTreasury yield curve continued to flatten. Despite this the markets expectsthe Fed to continue to normalise monetary policy with further tightening,although it may become less aggressive.

4 In the UK, Brexit and the difficulties of achieving Parliamentary agreementof the terms of the UK s withdrawal from the European Union, conspire toelevate uncertainty and to stimulate volatility. With a number of potentialoutcomes seemingly still possible, it seems likely that the process willcontinue to weigh on sentiment for UK In comparison to the last quarter, volatility increased in credit marketsallowing the manager to take advantage by adding risk to the portfolio,particularly in the industrial sector. The manager added bonds issued byWendel, General Electric, Vodafone and Vallourec. The automotive sectorlooked particularly attractive; the sector does face a number of challengesincluding the im-pact of trade wars and increased focus on emissions inEurope, but a number of high quality names have cheapened to compel-ling levels in particular General Motors, Mahle, and Valeo.

5 The manageralso added to the financials sector including the subordinated bondsissued by Axa and Bankia. These purchases were funded by selling highquality asset backed securities, cash and short dated financial bonds. Themanager also added expo-sure to the property sector including bondsissued by Hammer-son and Aroundtown. The fund continues to look for bond by bond opportunities, using thedefensive assets in the portfolio to fund the positioningAsset class*% cash and derivatives & foreign * BofA Merrill Lynch Level 2 Industry note that the data may not always add up to due to *% and cash and * Average of S&P, Moodys and Fitch or M&G internal note that the data may not always add up to due to PP Total return Credit investment Fund4th Quarter 2018 POOLED PENSIONSAll statistics from M&G internal sources as at.

6 Unless indicated factsheetM&G Investments POOLED PensionsM&G Investments POOLED PENSIONS manage a full range of funds on bothan active and passive basis for defined benefit and defined contributionclients. We believe that the quality of client service is an important partof our overall POOLED fund service. Our team of Client Directors is responsible for all aspects of ourrelationships with individual clients, including regular attendance attrustee meetings to present performance and investment DirectorsLian Golton 020 7548 Haughey020 7548 Spooner020 7548 Stott020 7548 Thomas020 7548 security purposes and to improve the quality of our service, we mayrecord and monitor telephone note that information contained within an email cannot beguaranteed as secure.

7 We advise that you do not include any sensitiveinformation when corresponding with M&G in this scheme membersIf you require further information about your pension please talk to yoursponsoring all general enquiries and administration please contact The Bank ofNew York Mellon Asset Servicing - Customer Services Desk on 0344 and technical informationUsage This factsheet is intended for trustees, sponsors, advisers and definedcontribution members of occupational pension schemes and personalpensions invested in M&G POOLED PENSIONS fund range. This factsheet reports upon the investment management of the fundduring the quarter.

8 There is no guarantee the fund objective will be This factsheet is provided for information purposes only. Any changesto your investment arrangements should be discussed with youradvisers. The commentary in this factsheet reflects the general views of M&Gand should not be taken as a recommendation or advice as to how aspecific market or fund is likely to Performance is measured on an offer price to offer price basis. The annual management charges are deducted before the unit pricesare set and hence before the net performance figures shown here arecalculated. To obtain unit price information for all funds in the M&G POOLED Pensionsfund range, Pension Schemes can log on to availability Not all of the funds available may be used by your scheme.

9 If you are in any doubt as to which M&G funds are applicable to you,please contact your personnel or PENSIONS department as are fund prices calculated? M&G POOLED PENSIONS funds operate on a single swinging price we create both bid and offer prices for each dealing day, thebasis on which units in the fund are transacted is dependent upon thecash flow into/out of the fund on any day. If the fund has net positivecash flow on the day then it will be priced on an offer basis. If the fundhas net negative cash flow on the day then it will be priced on a bidbasis. The annual management charges are deducted from the fund beforethe unit prices are calculated.

10 M&G POOLED PENSIONS funds are forward priced, which means that theunit price is set after money is invested. Money is invested on a T+0 dealing cycle, which means that money received before will beinvested by close of business that day and the unit price applicable forthat valuation date would be published by on the following is the risk rating? Risk ratings have been developed by Prudential to help provide anindication of a fund s potential level of risk and reward based on thetype of assets which may be held by the fund. Other companies mayuse different descriptions and as such these risk ratings should not beconsidered as generic across the fund management industry.