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M&G Investment Funds (3)
Annual report and audited financial statements for the year ended 30 June 2026
Page 2
Contents
Authorised Corporate Director’s Report .......... 1
Directors’ statement ......................... 4
Depositary’s Responsibilities and Report ......... 5
Independent Auditor’s Report .................. 6
Financial statements and notes ................. 9
Authorised Corporate Director’s Reports, including the portfolio statements, financial highlights, financial statements and notes for:
M&G Corporate Bond Fund ................... 16
M&G Dividend Fund ......................... 50
M&G Emerging Markets Bond Fund ............ 77
M&G Global Government Bond Fund ........... 120
M&G Recovery Fund ......................... 152
M&G Smaller Companies Fund ................ 180
Other regulatory disclosures ................... 204
Annual report and audited financial statements • June 2026
Page 3
The Authorised Corporate Director (ACD) of M&G Investment Funds (3) presents its annual report and audited financial statements for the year ended 30 June 2026.
The audited financial statements of M&G Investment Funds (3), the Authorised Corporate Director’s Reports including the portfolio statements, financial highlights and the audited financial statements and notes of each sub-fund are presented in their individual sections of this report as set out in the contents page.
Please note that an explanation of key investment terminology is available on our website at mandg.com/private-investor/glossary A printed copy of the glossary is available upon request by calling customer services and administration as shown within the ‘Investor information’ section of this report.
Company information
M&G Investment Funds (3) is an umbrella Open-Ended Investment Company (OEIC) and contains six sub-funds, hereinafter referred to as ‘funds’ in the rest of this report. Each fund is a UK UCITS (Undertakings for Collective Investment in Transferable Securities) scheme as defined in the Collective Investment Schemes sourcebook, as issued (and amended) by the Financial Conduct Authority (FCA). This OEIC is an Investment Company with Variable Capital (ICVC) incorporated under the Open-Ended Investment Companies Regulations 2001. It is authorised and regulated by the FCA under the Financial Services and Markets Act 2000.
The Company was authorised on 8 August 2001 and was launched on 7 March 2002, following the conversion of a series of authorised unit trusts.
The Company’s principal activity is to carry out business as an OEIC. The Company is structured as an umbrella company, and different funds may be established by the ACD from time to time with the agreement of the Depositary and approval from the FCA. The funds are operated separately and the assets of each fund are managed in accordance with the investment objective and policy applicable to that fund.
As at 30 June 2026 none of the funds held shares of the other funds within this OEIC.
A shareholder is not liable for the debts of the Company and will never be liable to make any further payment to the Company after paying the purchase price of the shares.
Fund managers The following fund managers are employed by M&G FA Limited which is an associate of M&G Securities Limited.
M&G Corporate Bond Fund Richard Woolnough, Ben Lord and Matthew Russell
Please note that effective from 1 May 2026 Matthew Russell was appointed as co-fund manager.
M&G Dividend Fund Michael Stiasny
M&G Emerging Markets Bond Fund Charles de Quinsonas, Nick Smallwood and Carlos Carranza
Please note that effective from 1 September 2025, Nick Smallwood replaced Claudia Calich as co-fund manager.
Please also note that effective from 1 January 2026, Carlos Carranza was appointed as co-fund manager.
M&G Global Government Bond Fund Eva Sun-Wai
M&G Recovery Fund Michael Stiasny
M&G Smaller Companies Fund James Taylor
ACD M&G Securities Limited 10 Fenchurch Avenue, London EC3M 5AG, UK Telephone: 0800 390 390 (UK only) (Authorised and regulated by the Financial Conduct Authority. M&G Securities Limited is a member of the Investment Association and of The Investing and Saving Alliance)
Authorised Corporate Director’s Report
Annual report and audited financial statements • June 2026 1
Page 4
Directors of the ACD D Allen* (non executive director), M Arona, C Dobson** (non executive director), S C Ellis (non executive director), K Fulker* (non executive director), P R Jelfs, M A Kwiatkowski***, M McGrade**** (non executive director), L J Mumford
* Appointed 1 June 2026. ** Resigned 1 October 2025 *** Appointed 4 December 2025. **** Resigned 1 June 2026.
Investment manager M&G Investment Management Limited 10 Fenchurch Avenue, London EC3M 5AG, UK (Authorised and regulated by the Financial Conduct Authority)
Registrar SS&C Financial Services Europe Ltd SS&C House, St. Nicholas Lane, Basildon Essex SS15 5FS, UK (Authorised and regulated by the Financial Conduct Authority)
Depositary NatWest Trustee & Depositary Services Limited House A, Floor 0, Gogarburn, 175 Glasgow Road Edinburgh EH12 1HQ, UK (Authorised and regulated by the Financial Conduct Authority)
Independent auditor Ernst & Young LLP Atria One, 144 Morrison Street, Edinburgh EH3 8EX, UK
Annual value assessment
An annual assessment report is available which shows the value provided to investors in each of M&G’s UK-based funds. The assessment report evaluates whether M&G’s charges are justified in the context of the overall service delivered to its investors. The latest report can be found on our website at mandg.com/investments/valueassessment
Climate-related Financial
Disclosures (TCFD)
We have produced TCFD reports in compliance with the FCA’s rules on climate-related financial disclosures. The TCFD fund reports are designed to help you understand the impact these funds have on the climate and equally how climate change could influence the performance of these funds. The reports will also give you the ability to compare a range of climate metrics with other funds. To understand the governance, strategy and risk management that M&G has in place to manage the risks and opportunities related to climate change, please refer to the M&G Investments Management TCFD report.
These reports are available via the Sustainability Disclosures page on our website at mandg.com/footer/ sustainability-disclosures
Important information
With effect from 1 September 2025, Claudia Calich resigned and Nick Smallwood was appointed as co-fund manager of the M&G Emerging Markets Bond Fund.
With effect from 1 January 2026, Carlos Carranza was appointed as co-fund manager of the M&G Emerging Markets Bond Fund.
Effective from 6 February 2026, M&G Investments has updated its Thermal Coal Investment Policy (‘the Policy’). A summary of the update can be found at group.mandg.com/thermal-coal-investment policychanges
Effective from 2 April 2026, securities lending was introduced as an eligible activity for the funds specified in the prospectus. The securities lending transactions will be undertaken solely for the purpose of efficient portfolio management and to generate additional income for the relevant funds.
With effect from 1 May 2026, Matthew Russell was appointed as co-fund manager of the M&G Corporate Bond Fund.
Authorised Corporate Director’s Report
2 Annual report and audited financial statements • June 2026
Page 5
On 18 June 2026 the Sterling Class ‘I-H’ share (Income and Accumulation shares), the Sterling Class ‘L-H’ share (Income and Accumulation shares) and the Sterling Class ‘PP-H’ share (Income and Accumulation shares) were launched for M&G Global Government Bond Fund.
Financial markets continue to be impacted by the invasion of Ukraine. Within the portfolios a small number of Russian securities are held. These securities were fair valued by M&G’s Valuation Sub Committee and marked as such in the portfolio statement. In addition, certain funds also hold Russian (RUB) cash balances. The Russian securities and cash are treated as non-contributing to the Net Asset Value and marked at nil, the status of both is reviewed periodically.
Please refer to the ‘Investment review’ section for details on any significant events during the period. Investment reviews may become quickly outdated in relation to ongoing economic and geopolitical events.
Investor information
The Prospectus, Instrument of Incorporation, Key Investor Information Documents, costs and charges illustration, the latest annual or interim investment report and financial statements as well as a list of purchases and sales are available free of charge on request from the following address. The Instrument of Incorporation can also be inspected at our offices or at the office of the Depositary.
Customer services and administration for UK clients: M&G Securities Limited PO Box 9039, Chelmsford CM99 2XG, UK
Please remember to quote your name and M&G client reference and sign any written communication to M&G. Failure to provide this will affect your ability to transact with us.
Telephone: 0800 390 390 (UK only)
For security purposes and to improve the quality of our service, we may record and monitor telephone calls. You will require your M&G client reference. Failure to provide this will affect your ability to transact with us.
Authorised Corporate Director’s Report
Annual report and audited financial statements • June 2026 3
Page 6
Authorised Corporate Director’s
Responsibilities
The Authorised Corporate Director (ACD) is required to prepare annual and interim reports for the Company. The ACD must ensure that the financial statements, contained in this report, for each of the funds are prepared in accordance with the Investment Association Statement of Recommended Practice for Financial Statements of UK Authorised Funds (SORP) and UK Financial Reporting Standards, and give a true and fair view of the net revenue or expenses and net capital gains or losses for the accounting period, and the financial position at the end of that period.
The ACD is required to keep proper accounting records, and to manage the Company in accordance with the Collective Investment Schemes sourcebook, as issued (and amended) by the FCA, the Instrument of Incorporation and the Prospectus, and to take reasonable steps for the prevention and detection of fraud or other irregularities. Additionally, the ACD is responsible for preparing the financial statements on a going concern basis unless it is appropriate to presume that the Company will not continue in operation.
Directors’ statement
This report has been prepared in accordance with the requirements of the Collective Investment Schemes sourcebook, as issued and amended by the FCA.
M&G Securities Limited 9 September 2026
Authorised Corporate Director’s Report
4 Annual report and audited financial statements • June 2026
Page 7
Statement of the Depositary’s
Responsibilities and Report of the
Depositary to the Shareholders
of M&G Investment Funds (3)
(‘the Company’) for the year
ended 30 June 2026
The Depositary must ensure that the Company is managed in accordance with the Financial Conduct Authority’s Collective Investment Schemes sourcebook, the Open-Ended Investment Companies Regulations 2001 (SI2001/1228) (the OEIC Regulations), as amended, the Financial Services and Markets Act 2000, as amended, (together ‘the Regulations’), the Company’s Instrument of Incorporation and Prospectus (together ‘the Scheme documents’) as detailed below.
The Depositary must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Company and its investors.
The Depositary is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the Company in accordance with the Regulations.
The Depositary must ensure that:
• the Company’s cashflows are properly monitored and that cash of the Company is booked into the cash accounts in accordance with the Regulations;
• the sale, issue, redemption and cancellation of shares are carried out in accordance with the Regulations;
• the value of shares in the Company is calculated in accordance with the Regulations;
• any consideration relating to transactions in the Company’s assets is remitted to the Company within the usual time limits;
• the Company’s income is applied in accordance with the Regulations; and
• the instructions of the Authorised Fund Manager (‘the AFM’) are carried out (unless they conflict with the Regulations).
The Depositary also has a duty to take reasonable care to ensure that the Company is managed in accordance with the Regulations and the Scheme documents in relation to the investment and borrowing powers applicable to the Company.
Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the Company, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Company, acting through the AFM:
i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and the application of the Company’s income in accordance with the Regulations and the Scheme documents of the Company, and
ii) has observed the investment and borrowing powers and restrictions applicable to the Company.
Edinburgh NatWest Trustee and 9 September 2026 Depositary Services Limited
Depositary’s Responsibilities and Report
Annual report and audited financial statements • June 2026 5
Page 8
Independent Auditor’s
Report to the shareholders of
M&G Investment Funds (3)
Opinion We have audited the financial statements of M&G Investment Funds (3) (“the Company”) comprising each of its sub-funds for the year ended 30 June 2026, which comprise the Statement of Total Return, the Statement of Change in Net Assets Attributable to Shareholders, the Balance Sheet, the related notes and the Distribution Tables, and the accounting, distribution and risk policies of the Company, which include a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 ‘The Financial Reporting Standard applicable to the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the financial position of the Company comprising each of its sub-funds as at 30 June 2026, and of the net revenue and the net capital gains/(losses) on the scheme property of the Company comprising each of its sub-funds for the year then ended; and
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report below. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s
(the FRC) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern In auditing the financial statements, we have concluded that the Authorised Corporate Director’s (“the ACD”) use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of 12 months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the ACD with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern.
Other information The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report thereon. The ACD is responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
Independent Auditor’s Report
6 Annual report and audited financial statements • June 2026
Page 9
performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the rules of the Collective Investment Schemes Sourcebook of the Financial Conduct Authority (the “FCA”) In our opinion:
• the financial statements have been properly prepared in accordance with the Statement of Recommended Practice relating to Authorised Funds, the rules of the Collective Investment Schemes Sourcebook of the FCA and the Instrument of Incorporation; and
• there is nothing to indicate that adequate accounting records have not been kept or that the financial statements are not in agreement with those records; and
• the information given in the ACD’s report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception We have nothing to report in respect of the following matter in relation to which the rules of the Collective Investment Schemes Sourcebook of the FCA require us to report to you if, in our opinion:
• we have not received all the information and explanations which, to the best of our knowledge and belief, are necessary for the purposes of our audit.
Responsibilities of the ACD As explained more fully in the ACDs responsibilities statement set out on page 4, the ACD is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the ACD determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the ACD is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the ACD either intends to wind up or terminate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Independent Auditor’s Report
Annual report and audited financial statements • June 2026 7
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Our approach was as follows:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are United Kingdom Generally Accepted Accounting Practice (UK GAAP), the Investment Management Association’s Statement of Recommended Practice (IMA SORP), the FCA Collective Investment Schemes Sourcebook, the OEIC Regulations, the Company’s Instrument of Incorporation and the Prospectus.
• We understood how the Company is complying with those frameworks through discussions with the ACD and the Company’s administrator and a review of the Company’s documented policies and procedures.
• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by considering the risk of management override, specifically management’s opportunity to influence revenue and amounts available for distribution.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved testing of journal entries, with a particular focus on manually posted entries and those reflecting large and unusual transactions. We also reviewed the reporting to the ACD with respect to the application of the documented policies and procedures and reviewed the financial statements to test compliance with the reporting requirements of the Company.
• Due to the regulated nature of the Company, the Statutory Auditor considered the experience and expertise of the engagement team to ensure that the team had the appropriate competence and capabilities, to identify non-compliance with the applicable laws and regulations.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at
frc.org.uk/auditorsresponsibilities This description forms part of our auditor’s report.
Use of our report This report is made solely to the Company’s shareholders, as a body, pursuant to Paragraph 4.5.12 of the rules of the Collective Investment Schemes sourcebook of the FCA. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
Edinburgh Ernst & Young LLP 9 September 2026 Statutory Auditor
Independent Auditor’s Report
8 Annual report and audited financial statements • June 2026
Page 11
The financial statements for M&G Investment Funds (3) comprise the individual financial statements for each fund and the notes below.
Notes to the financial statements
1 Statement of compliance The financial statements of M&G Investment Funds (3) have been prepared in compliance with UK Financial Reporting Standard 102 (FRS 102) and in accordance with the Statement of Recommended Practice (SORP) for Authorised Funds issued by the Investment Association in May 2014 and amended in June 2017, except in relation to the separate disclosure in note 13.
2 Summary of significant accounting policies a. Basis of preparation There are no material events that have been identified that may cast significant doubt on the Company’s ability to continue as a going concern for a period of twelve months from the date these financial statements are authorised for issue. The ACD believes that the Company has adequate resources to continue in operational existence for the foreseeable future and they continue to adopt the going concern basis in preparing the financial statements. The ACD has made an assessment of each fund’s ability to continue as a going concern which is made as at the date of issue of these financial statements and considers liquidity, declines in global capital markets, investor intention, known redemption levels, expense projections and key service provider’s operational resilience.
The financial statements of M&G Investment Funds (3) are prepared on a going concern basis, under the historical cost convention as modified by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss.
b. Functional and presentational currency Where the functional and presentational currency of a fund is not UK sterling this is disclosed in the Financial statements and notes’ of that fund.
c. Exchange rates Transactions in currencies other than each fund’s functional currency are translated at the rate of exchange ruling on the date of the transaction and where applicable assets and liabilities are translated into the fund’s functional currency at the rate of exchange ruling as at 12 noon on 30 June 2026 being the last business day of the accounting period.
d. Investments – recognition and valuation The provisions of both Section 11 and Section 12 of FRS 102 have been applied in full. All investments have been classified as fair value through profit and loss and recognised initially at fair value, which is normally the transaction price (excluding transaction costs and accrued interest).
At the end of the reporting period all investments have been measured at their fair value using the prices and the portfolio holdings determined at 12 noon on 30 June 2026, being the last valuation point of the accounting period, as this is not materially different from a valuation carried out at close of business on the balance sheet date.
Where separate bid and offer prices are available, the bid price is used for investment assets and the offer price for investment liabilities. Otherwise, the single price or most recent transaction price is used. Interest accrued is not included in the fair value. The methods of determining fair value for the principal classes of investment are:
• Equities and debt securities which are traded on an active market are included at the quoted price, which is normally the bid price, excluding any accrued interest in respect of bonds.
Financial statements and notes
Annual report and audited financial statements • June 2026 9
Page 12
• Equities traded on the Alternative Investment Market (AIM), whose liquidity cannot be guaranteed, are included at their quoted bid price as this represents the most objective and appropriate method of valuation.
• Collective investment schemes operated by the ACD are included at either their cancellation price for dual priced funds or their single price for single priced funds.
• Collective investment schemes operated by another manager are included at either their bid price for dual priced funds or their single price for single priced funds.
• Other equities and debt securities which are unquoted or not actively traded on a quoted market are included at a value estimated by the ACD using an appropriate valuation technique, excluding any accrued interest in respect of bonds.
• Exchange traded futures and options are included at the cost of closing out the contract at the balance sheet date.
• Over the counter equity options, credit default swaps, interest rate swaps, asset swaps and inflation swaps are included at a value provided by Markit Valuations Limited, an independent credit derivative price provider. Their fair value excludes any accrued interest in respect of derivatives where the income is revenue in nature.
• Forward currency contracts, for share class hedging and investment, are included at a value determined by reference to current forward exchange rates for contracts with similar maturity profiles.
e. Recognition of income and expenses • Dividends, including ordinary stock dividends, from equity investments are recognised when the security is quoted ex-dividend.
• Distributions from collective investment schemes are recognised when the scheme is priced ex-distribution.
• Interest on debt securities is recognised on an effective interest rate basis. Bank interest is recognised on an accruals basis.
• Underwriting commission is recognised when the issue takes place.
• Revenue from derivatives is recognised on an accruals basis.
• Securities lending revenue is recognised net of agents fees on an accruals basis.
• Fee rebates from investing in other collective investment schemes are recognised on an accruals basis.
• Expenses are recognised on an accruals basis.
f. Treatment of income and expenses • Any increases or decreases in the fair value of investments and gains and losses realised on sales of investments are treated as capital and recognised in net capital gains/(losses).
• The value of any enhancement to a stock dividend is treated as capital.
• Ordinary equity dividends, including ordinary stock dividends are treated as revenue.
• Special dividends, share buy backs or additional share issues may be treated as revenue or capital depending on the facts of each particular case.
• Distributions from collective investment schemes are treated as revenue in nature, except for any element of equalisation, which represents the average amount of income included in the price paid for the collective investment scheme, which is treated as capital.
Financial statements and notes
10 Annual report and audited financial statements • June 2026
Page 13
• Debt security interest comprises the coupon interest and the difference between the purchase price and the expected maturity price spread over its expected remaining life. This is treated as revenue with the difference adjusting the cost of the shares and treated as capital.
• Other interest income, such as bank interest is treated as revenue.
• Underwriting commission is treated as revenue, except where the fund is required to take up all or some of the shares underwritten, in which case a proportion of the commission received is deducted from the cost of the shares and treated as capital.
• The treatment of the income on derivative contracts depends upon the nature of the transaction. Both motive and circumstances are used to determine whether the returns should be treated as capital or revenue. Where positions are undertaken to protect or enhance capital, and the circumstances support this, the returns are recognised in net capital gains; similarly where the motives and circumstances are to generate or protect revenue, and the circumstances support this, the returns are included within net revenue before taxation. Where positions generate total returns it will generally be appropriate to apportion such returns between capital and revenue to properly reflect the nature of the transaction.
• Expenses relating to the purchase and sale of investments are treated as capital; all other expenses are treated as revenue.
• Rebates of charges from holdings in collective investment schemes are treated as revenue or capital in accordance with the underlying scheme’s distribution policy.
g. Operating charges Operating charges include payments made to M&G and to providers independent of M&G:
• Annual charge: Charge paid to M&G covering the annual cost of M&G managing and administering the fund and the costs of third parties providing services to the fund. For every £1 billion of a fund’s net asset value, a discount of 0.02% will be applied to that fund’s annual charge (up to a maximum of 0.12%).
• Extraordinary legal and tax expenses: Costs that specifically relate to legal or tax claims that are both exceptional and unforeseeable. Such expenses are uncommon, and would not be expected in most years. Although they result in a short-term cost to the fund, generally they can deliver longer term benefits for investors.
• Ongoing charges from underlying funds: Ongoing charges from underlying funds (excluding Investment Trust Companies and Real Estate Investment Trusts) will be rebated.
These charges do not include portfolio transaction costs or any entry and exit charges (also known as initial and redemption charges). The charging structures of share classes may differ, and therefore the operating charges may differ.
Operating charges are in line with the ongoing charges shown in the Key Investor Information Document, other than where there have been extraordinary legal or tax expenses, or an estimate has been used for the ongoing charge because a material change has made the operating charges unreliable as an estimate of future charges.
h. Portfolio transaction costs Portfolio transaction costs are incurred by funds when buying and selling investments. These costs vary depending on the types of investment, their market capitalisation, country of exchange and
Financial statements and notes
Annual report and audited financial statements • June 2026 11
Page 14
method of execution. They are made up of direct and indirect portfolio transaction costs:
• Direct portfolio transaction costs: Broker execution commission and taxes.
• Indirect portfolio transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the fund’s investments; some types of investment, such as fixed interest securities, have no direct transaction costs and only the dealing spread is paid.
Investments are bought or sold by a fund when changes are made to the investment portfolio and in response to net flows of money into or out of the fund from investors buying and selling shares in the fund.
To protect existing investors, portfolio transaction costs incurred as a result of investors buying and selling shares in the fund are recovered from those investors through a ‘dilution adjustment’ to the price they pay or receive.
i. Tax Dividends and similar income receivable are recognised at an amount that includes any withholding tax but excludes irrecoverable tax credits. Any withholding tax suffered is shown as part of the tax charge.
Tax is accounted for at the appropriate rate of corporation tax with relief for double taxation taken where appropriate. The tax accounting treatment follows the principal amounts involved.
Deferred tax is recognised in respect of temporary timing differences that have originated but not reversed by the balance sheet date. Deferred tax is measured on a non-discounted basis, at the average rate of tax expected to apply in the period in which it expects the deferred tax to be realised or settled. A deferred tax asset is only recognised to the extent that it is more likely than not that the asset will be recovered.
Marginal tax relief has not been taken into account in respect of expenses offset against capital.
j. Allocation of returns to share classes The annual charge is directly attributable to individual share classes. All other returns are apportioned to each fund’s share classes pro-rata to the value of the net assets of the relevant share class on the day that the income or expenses are recognised.
All available net revenue accounted for in accordance with the above policies and adjusted where relevant by any specific distribution policies set out in the notes to that fund’s financial statements, is distributed to holders of Income shares or retained and reinvested for holders of Accumulation shares. Should expenses and taxation together exceed revenue, there will be no distribution and the shortfall will be met from capital.
Distributions which have remained unclaimed by shareholders for more than six years are credited to the capital property of the fund.
3 Risk management policies
The ACD is responsible for establishing, implementing and maintaining an adequate and documented risk management policy for identifying, measuring and managing all risks to which funds are or might be exposed.
The Company’s investment activities expose it to various types of risk which are associated with the financial instruments and markets in which it invests; market risk, credit risk and liquidity risk.
These financial statements are designed to enable users to evaluate the nature and extent of those risks and how they are managed.
The following risk management policies are applicable to the funds, with specific risk disclosures set out in the notes to the financial statements of each fund.
Financial statements and notes
12 Annual report and audited financial statements • June 2026
Page 15
a. Market risk Market risk is the risk of loss resulting from fluctuations in the market value of positions in a fund’s portfolio attributable to changes in market variables, such as interest rates, exchange rates, equity and commodity prices or an issuer’s creditworthiness.
In relation to market risk, processes are applied that take account of the investment objective and policy of each fund. All funds are subject to an investment oversight process in accordance with the type and nature of the fund. In addition all funds are monitored for compliance within regulatory limits.
In measuring and monitoring market risk, the global exposure of a fund may be calculated using a ‘commitment’ approach or ‘Value at Risk’ (VaR) approach.
b. Commitment approach The commitment approach is applied for funds investing only in traditional asset classes, namely equities, fixed income, money market instruments and collective investment schemes.
In addition, the approach is applied for funds which use or intend to use derivatives or instruments embedding derivatives, but only for efficient portfolio management purposes, or in a simple way not necessarily restricted to efficient portfolio management.
Under the commitment approach the global exposure of funds is measured and monitored using a commitment (adjusted notional) methodology.
Market risk is considered on a daily basis and forms the foundation of investment oversight analysis. This can include for each fund (but is not limited to) the analysis of factors such as fund concentration; style, geographical, industry and market capitalisation biases; active, systematic and
specific risk measurements; active money; and beta characteristics.
c. Value at Risk approach The Value at Risk (VaR) approach is a methodology for estimating the maximum potential loss due to market risk based on historic market volatilities and correlations. More particularly, the VaR approach gives a broad indication of the maximum potential loss at a given confidence level (probability), over a specific time period under normal market conditions.
When VaR is used, it may be calculated using the Absolute VaR approach or the Relative VaR approach.
Absolute VaR is the VaR expressed as a percentage of the Net Asset Value of a fund which must not exceed an absolute limit. Under the Absolute VaR approach, the VaR limit is set as a percentage of the Net Asset Value of the relevant fund. The absolute 20-day VaR based on a 99% confidence interval must not exceed 20% of the fund’s Net Asset Value.
Under the Relative VaR approach, the VaR limit for a fund is set as a multiple of the VaR of the fund’s reference portfolio. The 20-day VaR of the fund based on a 99% confidence interval must not exceed twice the VaR of the fund’s reference portfolio. The Investment Manager monitors this limit by ensuring that the VaR of the fund divided by the VaR of the reference portfolio is not greater than 200%.
Financial statements and notes
Annual report and audited financial statements • June 2026 13
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The table below shows funds using the ‘commitment’ approach and those using either the Absolute or Relative ‘Value at Risk (VaR)’ approach:
Fund Global exposure approach M&G Corporate Bond Fund Relative VaR M&G Dividend Fund Commitment M&G Emerging Markets Bond Fund Relative VaR M&G Global Government Bond Fund
Relative VaR
M&G Recovery Fund Commitment
M&G Smaller Companies Fund Commitment
d. Liquidity risk Liquidity risk is the risk that a fund’s holdings cannot be sold, liquidated or closed out at limited cost in an adequately short time frame and that the ability of the scheme to comply at any time with its obligation to sell and redeem shares is thereby compromised.
The overall liquidity profile for each fund is reviewed and updated regularly. The liquidity profile takes into account investment, cashflow and market liquidity considerations.
Investment liquidity considerations include an assessment of asset class liquidity conditions, liquidity of underlying holdings, portfolio construction and concentration, the scale of individual stock ownership and the nature of the investment strategy.
Cashflow liquidity is managed in each fund on a daily basis using reports that include subscription and redemption information as well as the impact of trading, derivative lifecycle events and corporate action activity. In addition to the daily reporting, the fund managers are provided with reporting that highlights the impact of reasonably predictable events in the portfolio, including an allowance for the potential future exposures that might result from derivative exposures.
Market (or distribution-related) considerations include an assessment of asset demand, fund growth, client concentration and the persistency of the client base. Supplementary to this, market liquidity stress tests are carried out on a monthly basis for all funds.
Liquidity in funds is independently assessed and challenged through the internal governance process at M&G. Fund liquidity is modelled and compared against potential liability scenarios such as severe redemption or collateral calls and any funds with liquidity issues are flagged to the internal committee. Funds flagged to the internal committee are escalated and remedial action agreed. None of the funds have been escalated for remedial action.
e. Credit risk For funds exposed to credit risk, the credit rating, yield and maturity of each interest bearing security is considered to determine if the yield fully reflects the risk. The capital value of interest-bearing securities within the funds will fall in the event of the default or perceived increased credit risk of an issuer.
The capital value of interest-bearing securities within a fund may also be affected by interest rate fluctuations such that when interest rates rise, the capital value of the interest-bearing securities is likely to fall and vice versa.
Funds investing in derivatives are exposed to counterparty risk. This is the risk that the other party to the transaction fails to fulfil their obligations, either by failing to pay or failing to deliver securities. To minimise this risk, carefully selected, financially strong and well-established counterparties are selected following a thorough due diligence review and collateral is posted daily (in the form of cash or high-quality government bonds). Derivative positions are valued on a mark to-market basis (revalued to reflect prevailing market prices) daily and collateral moves from one
Financial statements and notes
14 Annual report and audited financial statements • June 2026
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counterparty to the other to reflect movements in the unrealised profit or loss. As a result, the maximum loss to the fund would be limited to that day’s price movements in affected derivatives contracts.
For funds in which they are used, credit default swaps are bought and sold in response to detailed credit research to take advantage of anticipated movements in credit spreads on individual stocks and baskets of securities. When a fund buys a credit default swap the default risk associated with the underlying security transfers to the counterparty. When a fund sells a credit default swap the fund assumes the credit risk of the underlying security.
f. Securities lending risk M&G Investment Management Limited ‘MAGIM’ manages a programme of securities lending for the following funds:
M&G Dividend Fund
M&G Emerging Markets Bond Fund
M&G Smaller Companies Fund
All funds that undertake securities lending activity must do so with approved counterparties under the relevant market standard GMSLA or GMRA. These master agreements contain standard provisions which lists specific choices that need to be made by the parties to operationalise the agreement and provides a record of supplemental terms and conditions. These documents also contain detail of the acceptable collateral and haircuts between each counterparty and the funds. Collateral is the main risk mitigation tool for securities lending activity which aims to reduce the impact of any counterparty default. Operationally, collateral is managed directly by MAGIM via specialist triparty agents (JPMorgan, HSBC (Crest), Bank of New York, Euroclear and Clearstream).
Collateral may be in the form of cash, UK gilts, certificates of deposit, treasury bills, sovereign
debt, euro or sterling bonds and equities. The value of the collateral held is greater than the value of securities on loan and is monitored as part of the efficient portfolio management process.
Financial statements and notes
Annual report and audited financial statements • June 2026 15
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For the purposes of these financial statements, the Prospectus dated 9 June 2026 has been used.
Investment objective
The fund aims to provide a higher total return (the combination of capital growth and income), net of the ongoing charge figure, than the average return of the iBoxx Sterling Corporates GBP Index over any five-year period.
Investment policy
At least 70% of the fund is invested, directly or indirectly through derivatives, in investment grade corporate debt securities including investment grade asset-backed securities. These securities can be issued by companies from anywhere in the world, including emerging markets. These securities are denominated in sterling or hedged back to sterling.
Other investments may include:
• debt securities issued or guaranteed by governments and their agencies, public authorities, quasi-sovereigns and supranational bodies and denominated in any currency;
• below investment grade and unrated debt securities;
• below investment grade and unrated asset-backed securities; and
• other transferable securities, cash, and near cash, directly or via collective investment schemes (including funds managed by M&G).
Investments in asset-backed securities are limited to 20% of the fund.
Derivatives may be used for investment purposes, efficient portfolio management and hedging.
Investment approach
The fund is diversified across a range of investment grade debt securities from a variety of sectors and geographies. The fund’s investment approach is based on the principle that returns from corporate bond markets are driven by a combination of macroeconomic, asset class, sector, geographic and stock-level factors. As different factors dominate returns at different stages of the economic cycle, the fund manager applies a flexible investment approach, changing the blend of duration and credit exposure in the portfolio to weight them appropriately. Individual credit selection is carried out with the assistance of an in-house team of credit analysts to complement the fund manager’s views.
Benchmark
iBoxx Sterling Corporates GBP Index
The benchmark is a target which the fund seeks to outperform. The index has been chosen 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 does not constrain the fund’s portfolio construction.
The fund is actively managed.
The fund manager has complete freedom in choosing which investments to buy, hold and sell in the fund.
For each share class the benchmark will be denominated or hedged into the relevant share class currency. The benchmark for each share class will be shown in its respective KIID.
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Risk profile
For details of the risks associated with this fund, please refer to the Prospectus. For details of the risk management policies, please refer to pages 12 to 15.
The following table shows the risk number associated with the fund and is based on Sterling Class ‘A’ shares.
Low risk High risk
Typically lower rewards Typically higher rewards
123 4 567
The above number:
• is based on the rate at which the value of the fund has moved up and down in the past and is based on historical data so may not be a reliable indicator of the future risk profile of the fund.
• is not guaranteed and may change over time and the lowest risk number does not mean risk free.
• has not changed during this period.
Investment review
For the year ended 30 June 2026
Performance against objective Over the reporting period, the fund delivered positive returns across all share classes. However, the fund finished behind the benchmark, the iBoxx Sterling Corporates GBP Index, which returned 4.6% over the same period.
Over five years, performance relative to the benchmark varied across the share classes, with the Sterling Class ‘A’ and ‘R’ shares underperforming, while the remaining share classes outperformed the benchmark which returned 0.3% pa. The fund’s objective is to provide a higher total return (the combination of capital growth and income), net of the ongoing charge figure, than the average return of the iBoxx Sterling Corporates GBP Index over any five-year period.
It should be noted that prior to 6 March 2023, the benchmark was the IA Sterling Corporate Bond Sector Average. Thereafter, it is the iBoxx Sterling Corporates GBP Index. The performance of the sector and that of the index have been linked to reflect the change.
For the performance of each share class, please refer to the ‘Long-term performance by share class’ table in the ‘Financial highlights’ section of this report.
Performance review UK government bonds (gilts) recorded a return of 2.6% in the 12-month period under review, with shorter-dated gilts outpacing longer maturities. Sterling denominated investment grade bonds returned 3.9%, as credit spreads tighten by around 15 basis points. (Credit spreads measure the difference between the yield of a corporate bond and a government bond of the same maturity.) Yields on 10-year gilts started the review period at 4.5% and ended at 4.8%, but varied widely throughout.
UK gilts struggled in the third quarter of 2025 (particularly for longer dated bonds), against a backdrop of persistent inflation. However, prices recovered in the fourth quarter as the inflation outlook improved. The Bank of England delivered quarter point cuts in interest rates in both August and December, taking the base rate to 3.75%.
The first two months of 2026 saw steady gains for UK government bonds, but sentiment soured quickly as the conflict in the Middle East sent energy prices sharply higher and clouded the macroeconomic outlook. The rise in oil prices fed into higher inflation forecasts and the expectation that interest rates would have to rise in 2026.
Pressure on gilts continued into the second quarter and resulted in 10-year yields moving above 5% during April, their highest level since before the Global Financial Crisis. However, as the quarter progressed, gilts recovered in tandem with the fall in oil prices and expectations of weaker economic growth.
Domestic politics featured heavily in the second quarter, notably the Makerfield by-election, the
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subsequent leadership challenge by Andy Burnham and the resignation of Prime Minister Keir Starmer. The prospect of a new prime minister raised questions about the future direction of fiscal policy and the new government’s economic priorities.
The fund recorded a positive return in the 12-month period, but marginally lagged its benchmark.
Security selection within credit had a negative effect on relative performance, whereas duration positioning was broadly neutral overall in the review period. (Duration is a measure of a bond’s sensitivity to changes in interest rates – the longer a bond’s duration the more sensitive it is to interest rate movements.)
Investment activities We were active throughout the review period adjusting the fund’s duration (which was long versus its benchmark in the 12 months), in response to market moves. Meanwhile, credit spread duration was held close to the benchmark, mostly marginally long. (Spread duration is a measure of a bond’s price sensitivity to changes in its credit spread). Within credit, our focus was on making relative value switches both within issuers and across sectors, to take advantage of market inefficiencies.
In August, we trimmed exposure to Philip Morris and British American Tobacco (BAT) and continued to reduce our exposure to longer-dated corporate bonds. We executed relative value switches in Verizon and Heathrow, where we secured a historically higher premium by moving into longer dated bonds offering better value.
In September, we reduced exposure to Electricite de France, and Philip Morris International and added positions in ENEL, Yorkshire Water, Suez, AT&T and Scottish Widows, amongst others. These trades reflect a continued preference for higher-quality issuers.
We participated in Meta’s multi-tranche US dollar issuance at the end of October, adding exposure to 20-, 30-, and 40-year maturities. In November, we participated in new issues from Alphabet and Amazon.
Elsewhere, we closed out the small exposure we held in Italian government bonds.
We participated in two new issues in December – ABN AMRO and United Overseas Bank – alongside modest top-ups in long-dated Meta bonds that were added in October.
In February 2026, we partially reduced inflation-linked gilt exposure, which we added in the summer of 2025, following strong performance.
We participated in new issuance from Alphabet in February and added more broadly to long-dated technology names. We reduced exposure to UK inflation-linked gilts further, rotating into conventional bonds. Elsewhere, we switched from bonds issued by E.ON maturing in 2032 into those maturing in 2037, where we saw better value.
In March, following the start of hostilities in the Middle East, we rotated from longer dated into shorter-dated bonds as we expected the resulting inflationary pressures to increase the likelihood of interest rate hikes.
We reduced exposure to gilts in April and added to corporate bonds. The decision was less about becoming more optimistic on corporate credit (where credit spreads remain tight) and more about becoming less confident about the outlook of gilts.
Activity in May included switching from Verizon 2034s into the 2036s and switching from Aegon into BAT. In June, trading focused on relative value opportunities within existing holdings and a number of issuer and maturity switches.
Outlook Looking ahead, political developments are likely to remain an important driver for UK markets. The UK government bond market faces a number of structural challenges, including a difficult fiscal position, a heavy ongoing financing requirement, and a political environment that may not place fiscal consolidation at the centre of policy.
While Andy Burnham’s comments around fiscal discipline have been broadly supportive, investors will
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18 Annual report and audited financial statements • June 2026
Page 21
be watching closely for cabinet appointments and any further signals on spending and borrowing plans. Alongside this, attention will remain on the Bank of England as markets continue to assess the outlook for growth, inflation and interest rates through the second half of 2026.
The fund continues to benefit from an attractive starting yield and from a duration perspective, we remain modestly overweight, while credit exposure is slightly longer than neutral, reflecting a preference to balance income generation with a measured approach to risk.
Richard Woolnough, Ben Lord and Matthew Russell Co-fund managers
Employees of M&G FA Limited which is an associate of M&G Securities Limited. Please also note that effective from 1 May 2026, Matthew Russell was appointed as co-fund manager. Please note that the views expressed in this Report should not be taken as a recommendation or advice on how the fund or any holding mentioned in the Report is likely to perform. If you wish to obtain financial advice as to whether an investment is suitable for your needs, you should consult a Financial Adviser.
M&G Corporate Bond Fund
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Annual report and audited financial statements • June 2026 19
Page 22
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 %
Fixed income 1,052,115 92.14 93.25 Euro denominated bonds 25,405 2.23 5.00 Corporate bonds 24,657 2.16 4.69 EUR1,000,000 Allianz SE Var 2.625% Perpetual 784 0.07 EUR2,500,000 AXA SA Var 6.375% Perpetual 2,311 0.20
EUR1,000,000 Credit Agricole SA Var 5.875% Perpetual 884 0.08 EUR5,000,000 JT International Financial Services BV 3.625% 11/04/2034 4,251 0.37
EUR2,500,000 Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Var 4.25% 26/05/2044
2,187 0.19
EUR1,000,000 NN Group NV Var 5.75% Perpetual 876 0.08 EUR1,638,000 NN Group NV Var 6.375% Perpetual 1,490 0.13 EUR4,000,000 Philip Morris International, Inc. 1.45% 01/08/2039 2,502 0.22 EUR5,000,000 Philip Morris International, Inc. 1.875% 06/11/2037 3,476 0.30 EUR8,000,000 Philip Morris International, Inc. 2% 09/05/2036 5,896 0.52
Government bonds 748 0.07 0.31 EUR1,000,000 SNCF Reseau 4.125% 22/03/2062 748 0.07
Sterling denominated bonds 974,821 85.37 86.72 Corporate bonds 866,631 75.89 74.10 GBP3,400,000 ABN AMRO Bank NV 4.625% 08/11/2030 3,351 0.29 GBP6,000,000 ABN AMRO Bank NV 5.375% 21/12/2032 6,033 0.53 GBP5,000,000 Aegon Ltd. 6.625% 16/12/2039 5,384 0.47 GBP10,000,000 Alphabet, Inc. 5.5% 13/11/2041 9,687 0.85
GBP7,500,000 Alphabet, Inc. 5.875% 13/02/2058 7,174 0.63 GBP17,500,000 Alphabet, Inc. 6.125% 13/02/2126 16,687 1.46 GBP20,000,000 Apple, Inc. 3.6% 31/07/2042 15,922 1.39 GBP5,000,000 Aroundtown SA 3% 16/10/2029 4,634 0.41 GBP10,000,000 AT&T, Inc. 4.25% 01/06/2043 7,772 0.68 GBP2,000,000 AT&T, Inc. 4.875% 01/06/2044 1,673 0.15
GBP5,000,000 Australia & New Zealand Banking Group Ltd. Var 1.809% 16/09/2031
4,967 0.44
GBP5,000,000 Australia & New Zealand Banking Group Ltd. Var 5.1454% 18/08/2036
4,949 0.43
GBP8,000,000 Aviva PLC Var 4% 03/06/2055 6,904 0.60 GBP6,017,000 Aviva PLC Var 4.375% 12/09/2049 5,846 0.51
M&G Corporate Bond Fund
Portfolio statement
Investments
20 Annual report and audited financial statements • June 2026
Page 23
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP1,000,000 Aviva PLC Var 6.125% 12/09/2054 1,017 0.09 GBP3,000,000 Banco Bilbao Vizcaya Argentaria SA Var 3.104% 15/07/2031 2,998 0.26 GBP800,000 Banco Santander SA 5.125% 25/01/2030 807 0.07 GBP800,000 Banco Santander SA 5.375% 17/01/2031 814 0.07 GBP5,414,000 Bank of America Corp. Var 1.667% 02/06/2029 5,115 0.45
GBP3,500,000 Bank of Ireland Group PLC Var 7.594% 06/12/2032 3,597 0.32 GBP5,000,000 Barclays Bank U.K. PLC FRN 4.2163% 13/03/2029 5,006 0.44 GBP5,000,000 Barclays PLC Var 6.369% 31/01/2031 5,196 0.46 GBP5,000,000 Barclays PLC Var 8.407% 14/11/2032 5,208 0.46 GBP3,000,000 BAT International Finance PLC 4% 23/11/2055 1,987 0.17 GBP8,000,000 BAT International Finance PLC 5.75% 05/07/2040 7,694 0.67 GBP5,000,000 BAT International Finance PLC 6% 24/11/2034 5,144 0.45
GBP25,000,000 Berkshire Hathaway Finance Corp. 2.375% 19/06/2039 17,604 1.54 GBP1,000,000 BNP Paribas SA 2% 13/09/2036 723 0.06 GBP4,000,000 BNP Paribas SA 2.875% 24/02/2029 3,807 0.33 GBP8,000,000 BNP Paribas SA 5.75% 13/06/2032 8,201 0.72 GBP1,000,000 BPCE SA 5.25% 16/04/2029 1,000 0.09 GBP8,000,000 BPCE SA Var 2.5% 30/11/2032 7,721 0.68
GBP3,000,000 BPCE SA Var 5.375% 22/10/2031 3,018 0.26 GBP7,500,000 British Telecommunications Ltd. 3.625% 21/11/2047 5,122 0.45 GBP12,000,000 British Telecommunications Ltd. 5.625% 03/12/2041 11,341 0.99 GBP5,000,000 British Telecommunications Ltd. 6.375% 23/06/2037 5,227 0.46 GBP2,840,000 Broadgate Financing PLC 4.821% 05/07/2036 2,775 0.24 GBP619,400 Broadgate Financing PLC 4.999% 05/10/2033 613 0.05 GBP2,000,000 BUPA Finance PLC 4.125% 14/06/2035 1,753 0.15
GBP11,000,000 Cadent Finance PLC 2.625% 22/09/2038 7,768 0.68 GBP5,000,000 CaixaBank SA Var 3.5% 06/04/2028 4,959 0.43 GBP2,500,000 Carlsberg Breweries AS 5.5% 28/02/2039 2,431 0.21 GBP2,500,000 Centrica PLC 4.25% 12/09/2044 1,926 0.17 GBP5,000,000 Centrica PLC 7% 19/09/2033 5,436 0.48
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 21
Page 24
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP7,000,000 Channel Link Enterprises Finance PLC Var 3.043% 30/06/2050
6,559 0.57
GBP1,500,000 Cie de Saint-Gobain SA 4.625% 09/10/2029 1,492 0.13 GBP8,000,000 Cooperatieve Rabobank UA 4.625% 23/05/2029 7,908 0.69
GBP171,897 Coventry & Rugby Hospital Co. PLC Inflation-Linked 3.246% 30/06/2040
366 0.03
GBP2,785,000 CPUK Finance Ltd. 3.69% 28/02/2047 2,694 0.24 GBP7,700,000 Credit Agricole SA Var 1.874% 09/12/2031 7,600 0.67 GBP2,000,000 Credit Agricole SA Var 5.75% 29/11/2027 2,009 0.18
GBP5,000,000 Credit Agricole SA Var 6% 22/10/2035 5,087 0.45 GBP5,000,000 E.ON International Finance BV 4.75% 31/01/2034 4,804 0.42 GBP7,000,000 E.ON International Finance BV 5.875% 30/10/2037 6,992 0.61 GBP2,000,000 E.ON International Finance BV 6.125% 06/07/2039 2,013 0.18 GBP5,000,000 Electricite de France SA 6% 23/01/2114 4,242 0.37 GBP7,000,000 ENEL Finance International NV 5.75% 14/09/2040 6,751 0.59 GBP15,000,000 Engie SA 5.75% 28/10/2050 13,714 1.20
GBP1,865,000 ENW Finance PLC 4.893% 24/11/2032 1,847 0.16 GBP5,000,000 Gatwick Funding Ltd. 2.625% 07/10/2048 2,877 0.25 GBP5,000,000 Gatwick Funding Ltd. 2.875% 05/07/2051 2,846 0.25 GBP11,000,000 Gatwick Funding Ltd. 3.125% 28/09/2041 8,040 0.70 GBP3,000,000 Gatwick Funding Ltd. 5.5% 04/04/2042 2,801 0.25 GBP2,500,000 Gatwick Funding Ltd. 5.625% 18/02/2038 2,458 0.22
GBP5,000,000 Goldman Sachs Group, Inc. 6.875% 18/01/2038 5,309 0.47 GBP3,000,000 Grand Union Group Funding PLC 4.625% 04/12/2043 2,512 0.22 GBP913,000 Great Portland Estates PLC 5.375% 25/09/2031 914 0.08 GBP514,707 Greater Gabbard OFTO PLC 4.137% 29/11/2032 498 0.04 GBP867,839 Greene King Finance PLC 4.0643% 15/03/2035 812 0.07 GBP940,667 Greene King Finance PLC 5.318% 15/09/2031 937 0.08 GBP2,500,000 Guinness Partnership Ltd. 4% 24/10/2044 1,914 0.17
GBP4,000,000 Hammerson PLC 5.875% 08/10/2036 3,959 0.35 GBP15,000,000 Heathrow Funding Ltd. 2.75% 09/08/2051 8,501 0.74
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Investments (continued)
22 Annual report and audited financial statements • June 2026
Page 25
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP5,000,000 Heathrow Funding Ltd. 5.875% 13/05/2043 4,788 0.42 GBP2,500,000 Heathrow Funding Ltd. 6.45% 10/12/2033 2,647 0.23 GBP4,000,000 HJ Heinz Finance U.K. PLC 6.25% 18/02/2030 4,135 0.36 GBP1,192,000 Housing Finance Corp. Ltd. 5% 30/09/2027 1,183 0.10 GBP5,000,000 HSBC Holdings PLC 7% 07/04/2038 5,337 0.47
GBP2,000,000 HSBC Holdings PLC Var 3% 29/05/2030 1,897 0.17 GBP3,000,000 HSBC Holdings PLC Var 8.201% 16/11/2034 3,238 0.28 GBP600,000 Hyde Housing Association Ltd. 1.75% 18/08/2055 240 0.02 GBP18,000,000 Imperial Brands Finance PLC 4.875% 07/06/2032 17,578 1.54 GBP4,000,000 ING Groep NV Var 6.25% 20/05/2033 4,074 0.36 GBP718,777 Integrated Accommodation Services PLC 6.48% 31/03/2029 734 0.06 GBP5,000,000 InterContinental Hotels Group PLC 3.375% 08/10/2028 4,825 0.42
GBP12,000,000 International Business Machines Corp. 4.875% 06/02/2038 10,987 0.96 GBP728,000 Intesa Sanpaolo SpA 5.148% 10/06/2030 724 0.06 GBP2,500,000 Intesa Sanpaolo SpA 6.625% 31/05/2033 2,693 0.24 GBP3,500,000 Intesa Sanpaolo SpA 8.505% 20/09/2032 4,024 0.35 GBP2,500,000 JT International Financial Services BV 2.75% 28/09/2033 2,120 0.19 GBP3,000,000 La Banque Postale SA Var 5.625% 21/09/2028 3,025 0.26
GBP5,877,000 Land Securities Capital Markets PLC 2.399% 08/02/2031 5,525 0.48 GBP5,000,000 Land Securities Capital Markets PLC 2.625% 22/09/2039 3,763 0.33 GBP9,000,000 Land Securities Capital Markets PLC 4.75% 18/09/2033 8,901 0.78 GBP2,000,000 Land Securities Capital Markets PLC 4.875% 15/09/2034 1,984 0.17 GBP4,000,000 Leeds Building Society FRN 4.2268% 04/04/2029 4,006 0.35 GBP10,000,000 Legal & General Group PLC Var 5.125% 14/11/2048 9,952 0.87 GBP7,000,000 Legal & General Group PLC Var 6.625% 01/04/2055 7,257 0.64
GBP7,500,000 Lloyds Bank PLC 6.5% 17/09/2040 7,992 0.70 GBP350,000 Lloyds Bank PLC 11.75% Perpetual 615 0.05 GBP15,000,000 Lloyds Banking Group PLC Var 2.707% 03/12/2035 13,385 1.17
GBP787,000 Lloyds Banking Group PLC Var 7.5% Perpetual 810 0.07 GBP1,562,000 Logicor Financing SARL 2.75% 15/01/2030 1,436 0.13
M&G Corporate Bond Fund
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Investments (continued)
Annual report and audited financial statements • June 2026 23
Page 26
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP1,000,000 London & Quadrant Housing Trust 2.625% 28/02/2028 963 0.08 GBP750,000 Longstone Finance PLC 4.896% 19/04/2036 739 0.06 GBP2,000,000 Manchester Airport Group Funding PLC 2.875% 31/03/2039 1,472 0.13 GBP5,000,000 Manchester Airport Group Funding PLC 2.875% 30/09/2044 3,195 0.28 GBP8,000,000 Manchester Airport Group Funding PLC 4.75% 31/03/2034 7,765 0.68
GBP4,807,000 Mercantile Investment Trust PLC 6.125% 25/02/2030 4,902 0.43 GBP3,000,000 Metropolitan Life Global Funding I 0.625% 08/12/2027 2,836 0.25 GBP1,000,000 Metropolitan Life Global Funding I 1.625% 21/09/2029 909 0.08 GBP7,500,000 Morgan Stanley Var 5.213% 24/10/2035 7,364 0.64 GBP10,000,000 Morgan Stanley Var 5.789% 18/11/2033 10,265 0.90 GBP5,000,000 Motability Operations Group PLC 1.5% 20/01/2041 2,804 0.25 GBP2,500,000 Motability Operations Group PLC 2.125% 18/01/2042 1,494 0.13
GBP7,000,000 National Gas Transmission PLC 1.125% 14/01/2033 5,456 0.48 GBP1,100,000 National Gas Transmission PLC 5.5% 04/02/2034 1,108 0.10 GBP4,000,000 National Grid Electricity Distribution East Midlands PLC 1.75% 09/09/2031
3,413 0.30
GBP5,000,000 National Grid Electricity Distribution West Midlands PLC 5.75% 16/04/2032
5,128 0.45
GBP5,000,000 National Grid Electricity Transmission PLC 2% 16/09/2038 3,312 0.29 GBP5,000,000 National Grid Electricity Transmission PLC 2% 17/04/2040 3,142 0.28 GBP10,000,000 Nationwide Building Society FRN 4.1465% 24/02/2031 9,956 0.87 GBP10,000,000 Nationwide Building Society Var 5.5% 14/07/2036 9,987 0.87
GBP6,000,000 NatWest Group PLC Var 2.105% 28/11/2031 5,975 0.52 GBP2,500,000 NatWest Group PLC Var 5.642% 17/10/2034 2,522 0.22 GBP3,500,000 NatWest Group PLC Var 7.5% Perpetual 3,598 0.32 GBP5,000,000 NIE Finance PLC 5.875% 01/12/2032 5,158 0.45 GBP4,000,000 Nordea Bank Abp Var 1.625% 09/12/2032 3,838 0.34 GBP3,000,000 Northern Gas Networks Finance PLC 5.625% 23/03/2040 2,833 0.25 GBP2,750,000 Northern Powergrid Yorkshire PLC 4.375% 05/07/2032 2,654 0.23
GBP1,286,000 Northumbrian Water Finance PLC 5.5% 02/10/2037 1,213 0.11 GBP2,500,000 Northumbrian Water Finance PLC 5.625% 29/04/2033 2,489 0.22
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
24 Annual report and audited financial statements • June 2026
Page 27
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP3,000,000 Northumbrian Water Finance PLC 6.375% 28/10/2034 3,096 0.27 GBP2,000,000 Notting Hill Genesis 2% 03/06/2036 1,430 0.13 GBP2,000,000 Notting Hill Genesis 3.25% 12/10/2048 1,262 0.11 GBP3,000,000 Notting Hill Genesis 3.75% 20/12/2032 2,734 0.24 GBP3,000,000 Omnicom Capital Holdings PLC 2.25% 22/11/2033 2,392 0.21
GBP1,500,000 Orsted AS 5.375% 13/09/2042 1,327 0.12 GBP5,000,000 Pearson Funding PLC 3.75% 04/06/2030 4,782 0.42 GBP1,453,000 Pearson Funding PLC 6.375% 28/04/2036 1,486 0.13 GBP2,000,000 Places for People Homes Ltd. 3.625% 22/11/2028 1,934 0.17 GBP5,000,000 Places For People Treasury PLC 2.5% 26/01/2036 3,746 0.33 GBP5,000,000 Places For People Treasury PLC 5.75% 11/05/2055 4,432 0.39
GBP94,270 Road Management Services A13 PLC Inflation-Linked 3.642% 31/03/2028
231 0.02
GBP4,000,000 Santander U.K. Group Holdings PLC Var 2.421% 17/01/2029 3,859 0.34
GBP10,000,000 Santander U.K. PLC 5.25% 16/02/2029 10,184 0.89 GBP4,000,000 Scotland Gas Networks PLC 4.875% 21/12/2034 3,790 0.33 GBP2,500,000 Scottish Widows Ltd. 7% 16/06/2043 2,587 0.23 GBP15,000,000 Severn Trent Utilities Finance PLC 2% 02/06/2040 9,240 0.81 GBP5,000,000 Severn Trent Utilities Finance PLC 4.625% 30/11/2034 4,693 0.41 GBP5,000,000 Severn Trent Utilities Finance PLC 5.25% 04/04/2036 4,812 0.42
GBP2,500,000 Severn Trent Utilities Finance PLC 5.875% 31/07/2038 2,472 0.22 GBP2,620,000 Skipton Building Society Var 6.25% 25/04/2029 2,685 0.24 GBP7,500,000 Snam SpA 5.75% 26/11/2036 7,528 0.66 GBP1,888,000 Society of Lloyd’s Var 4.875% 07/02/2047 1,884 0.17 GBP3,100,000 South Eastern Power Networks PLC 6.375% 12/11/2031 3,292 0.29
GBP3,000,000 Southern Electric Power Distribution PLC 4.625% 20/02/2037
2,741 0.24
GBP6,000,000 Southern Gas Networks PLC 3.1% 15/09/2036 4,732 0.41 GBP3,676,000 SP Transmission PLC 2% 13/11/2031 3,180 0.28
GBP2,000,000 SSE PLC 6.25% 27/08/2038 2,058 0.18 GBP12,000,000 Suez SACA 6.625% 05/10/2043 12,216 1.07
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 25
Page 28
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP3,000,000 Swedbank AB Var 7.272% 15/11/2032 3,091 0.27 GBP430,397 Telereal Securitisation PLC 1.3657% 10/12/2033 381 0.03 GBP149,911 Telereal Securitisation PLC 6.1645% 10/12/2033 153 0.01 GBP6,288,000 Temasek Financial I Ltd. 5.125% 26/07/2040 6,165 0.54 GBP4,221,126 Tesco Property Finance 3 PLC 5.744% 13/04/2040 4,216 0.37
GBP4,295,915 Tesco Property Finance 4 PLC 5.8006% 13/10/2040 4,292 0.38 GBP1,777,175 Tesco Property Finance 5 PLC 5.6611% 13/10/2041 1,754 0.15 GBP5,445,993 Tesco Property Finance 6 PLC 5.4111% 13/07/2044 5,240 0.46 GBP2,000,000 Time Warner Cable LLC 5.25% 15/07/2042 1,632 0.14 GBP3,400,000 Trafford Centre Finance Ltd. FRN 4.591% 28/07/2038 3,252 0.28 GBP3,250,000 TSB Bank PLC FRN 4.1164% 22/06/2028 3,245 0.28 GBP5,000,000 UBS Group AG Var 2.25% 09/06/2028 4,891 0.43
GBP7,500,000 UBS Group AG Var 7.375% 07/09/2033 8,347 0.73 GBP5,000,000 United Overseas Bank Ltd. FRN 4.2665% 08/06/2029 5,002 0.44 GBP10,000,000 United Utilities Water Finance PLC 1.75% 10/02/2038 6,485 0.57 GBP12,500,000 United Utilities Water Finance PLC 1.875% 03/06/2042 7,043 0.62 GBP5,000,000 Verizon Communications, Inc. 1.875% 03/11/2038 3,267 0.29 GBP10,000,000 Verizon Communications, Inc. 3.375% 27/10/2036 8,147 0.71
GBP6,000,000 Vodafone Group PLC 3.375% 08/08/2049 3,791 0.33 GBP250,000 Washington Mutual, Inc. 0% 10/06/2059 a 0 0.00 GBP15,000,000 Wellcome Trust Finance PLC 4.625% 25/07/2036 14,388 1.26 GBP7,000,000 Wellcome Trust Ltd. 2.517% 07/02/2118 3,067 0.27 GBP2,000,000 Wells Fargo & Co. 2.125% 24/09/2031 1,741 0.15 GBP8,000,000 Wells Fargo & Co. 4.875% 29/11/2035 7,528 0.66 GBP4,000,000 Westfield America Management Ltd. 2.625% 30/03/2029 3,759 0.33
GBP1,113,000 Westfield Stratford City Finance No. 3 PLC 5.124% 05/05/2036
1,122 0.10
GBP5,000,000 Westpac Banking Corp. FRN 4.3461% 03/07/2028 5,012 0.44 GBP5,000,000 Westpac Banking Corp. FRN 4.4975% 11/01/2028 5,023 0.44 GBP6,000,000 Whitbread Group PLC 3% 31/05/2031 5,385 0.47 GBP2,426,000 Yorkshire Power Finance Ltd. 7.25% 04/08/2028 2,526 0.22
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
26 Annual report and audited financial statements • June 2026
Page 29
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Sterling denominated bonds (continued) Corporate bonds (continued)
GBP9,684,000 Yorkshire Water Finance PLC 2.75% 18/04/2041 6,200 0.54 GBP8,000,000 Zurich Finance Ireland DAC Var 5.125% 23/11/2052 7,869 0.69
Government bonds 97,347 8.53 11.74 GBP5,000,000 European Investment Bank 4.5% 07/03/2044 4,520 0.40 GBP11,500,000 U.K. Gilts 4.25% 07/12/2046 9,941 0.87 GBP8,711,500 U.K. Gilts 4.375% 31/01/2040 8,135 0.71 GBP5,000,000 U.K. Gilts 4.375% 31/07/2054 4,233 0.37 GBP48,000,000 U.K. Gilts 4.75% 22/10/2043 45,168 3.96
GBP25,000,000 U.K. Gilts 5.25% 31/01/2041 25,350 2.22
Mortgage backed securities 10,843 0.95 0.88 GBP2,136,030 Mitchells & Butlers Finance PLC FRN 4.4658% 15/12/2033 2,039 0.18
GBP8,796,000 Permanent Master Issuer PLC FRN 4.2968% 15/07/2073 8,804 0.77
US dollar denominated bonds 51,889 4.54 1.53 Corporate bonds 51,889 4.54 1.21 USD7,500,000 Amazon.com, Inc. 5.45% 20/11/2055 5,398 0.47 USD14,000,000 Amazon.com, Inc. 5.55% 20/11/2065 9,974 0.87 USD3,500,000 Amazon.com, Inc. 6.05% 13/03/2076 2,660 0.23 USD1,400,000 Banco Santander SA Var 3.225% 22/11/2032 957 0.08 USD4,000,000 ENEL Finance International NV 6.8% 15/09/2037 3,321 0.29 USD2,000,000 Ford Motor Co. 4.75% 15/01/2043 1,195 0.11
USD5,000,000 Meta Platforms, Inc. 5.5% 15/11/2045 3,533 0.31 USD5,000,000 Meta Platforms, Inc. 5.625% 15/11/2055 3,456 0.30 USD7,000,000 Meta Platforms, Inc. 5.75% 15/11/2065 4,796 0.42 USD5,000,000 Meta Platforms, Inc. 6.45% 15/05/2066 3,772 0.33 USD2,500,000 Microsoft Corp. 2.525% 01/06/2050 1,129 0.10 USD5,000,000 Microsoft Corp. 3.041% 17/03/2062 2,295 0.20
USD1,500,000 National Australia Bank Ltd. Var 3.347% 12/01/2037 1,026 0.09 USD340,000 Oracle Corp. 3.6% 01/04/2040 188 0.02 USD6,000,000 Oracle Corp. 3.85% 01/04/2060 2,680 0.24
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 27
Page 30
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD5,000,000 Tesco PLC 6.15% 15/11/2037 3,879 0.34 USD2,500,000 WPP Finance 2010 5.625% 15/11/2043 1,630 0.14
Government bonds 0 0.00 0.32 Derivatives (400) (0.04) 0.16 Forwards (632) (0.06) 0.00
Bought USD811,724 for GBP610,186 Settlement 22/07/2026
3 0.00
Sold EUR30,842,052 for GBP26,699,202 Settlement 22/07/2026
109 0.01
Sold USD70,323,156 for GBP52,388,771 Settlement 22/07/2026
(744) (0.07)
Futures 340 0.03 0.00 235 Euro-BTP Italian Bond Futures Sep 2026 340 0.03
Interest rate swaps (108) (0.01) 0.16 EUR10,000,000 Pay 3.1322% Receive VAR 16/02/2056 (144) (0.01) EUR7,500,000 Pay 3.1912% Receive VAR 11/02/2056 (184) (0.02) USD25,000,000 Pay 3.9657% Receive VAR 05/03/2056 469 0.04 USD15,000,000 Pay 4.2382% Receive VAR 13/05/2056 (249) (0.02)
Total portfolio 1,051,715 92.10 93.41
Net other assets/(liabilities) 90,180 7.90 6.59 Net assets attributable to shareholders 1,141,895 100.00 100.00
a Defaulted bond.
M&G Corporate Bond Fund
Portfolio statement
Investments (continued)
28 Annual report and audited financial statements • June 2026
Page 31
Top ten portfolio transactions for the year to 30 June 2026
Largest purchases £’000 U.K. Gilts 4.375% 31/01/2040 45,990 U.K. Gilts 4.25% 07/12/2046 44,935
U.K. Gilts 4.5% 07/03/2035 29,993 U.K. Gilts 5.25% 31/01/2041 24,815 Alphabet, Inc. 5.875% 13/02/2058 16,919 Alphabet, Inc. 6.125% 13/02/2126 16,809 U.K. Inflation-Linked Gilts 0.125% 22/03/2039 16,201 U.K. Gilts 4.375% 07/03/2028 15,143
U.K. Gilts 4.75% 22/10/2043 14,355 U.K. Gilts 1.75% 22/07/2057 13,572 Other purchases 379,143
Total purchases 617,875
Largest sales £’000 U.K. Gilts 4.25% 07/12/2046 50,176 U.K. Gilts 4.375% 31/01/2040 38,949 U.K. Gilts 4% 22/01/2060 38,170 U.K. Gilts 4.5% 07/03/2035 29,316 U.K. Gilts 4.375% 31/07/2054 25,301 U.K. Gilts 1.5% 31/07/2053 19,538 U.K. Inflation-Linked Gilts 0.125% 22/03/2039 16,512
BG Energy Capital PLC 5% 04/11/2036 16,470 SNCF Reseau 5.25% 31/01/2035 15,286 U.K. Gilts 4.375% 07/03/2028 14,991
Other sales 456,005 Total sales 720,714
Purchases and sales exclude the cost and proceeds of ‘AAA’ rated money market funds.
M&G Corporate Bond Fund
Portfolio statement
Annual report and audited financial statements • June 2026 29
Page 32
Fund performance
Please note past performance is not a guide to future performance and the value of investments, and the income from them, will fluctuate. This will cause the fund price to fall as well as rise and you may not get back the original amount you invested.
As different share classes have different attributes, for example charging structures and minimum investments, please be aware that their performance may be different.
For additional information, including monthly fund commentaries, fund facts, historic prices, distribution rates, performance information (including a range of performance graphs) and other documents, please visit our website at mandg.com/investments
Long-term performance by share class To give an indication of the performance of the fund, the following table shows the compound rate of return, per annum, over the period. Calculated on a price to price basis with income reinvested and shown as net of operating charge. Please refer to ‘Specific share class performance’ tables for the share class launch dates.
Share class One year % a
Three years % pa
Five years % pa
Ten years % pa Sterling Class ‘A’ Income +3.8 +6.3 +0.0 +1.9 Class ‘A’ Accumulation +3.8 +6.3 +0.0 +1.9 Class ‘I’ Income +4.2 +6.7 +0.4 +2.3 Class ‘I’ Accumulation +4.2 +6.7 +0.4 +2.3 Class ‘M’ Income +4.5 n/a n/a n/a Class ‘M’ Accumulation +4.5 n/a n/a n/a Class ‘PP’ Income +4.3 +6.8 +0.5 n/a Class ‘PP’ Accumulation +4.3 +6.8 +0.5 n/a
Class ‘R’ Income +4.0 +6.5 +0.2 +2.1 Class ‘R’ Accumulation +4.0 +6.5 +0.2 +2.1
Benchmark +4.6 +7.1 +0.3 +2.3
a Not annualised.
Specific share class performance
The following comparative tables show the performance of each share class. All ‘Performance and charges’ percentages represent an annual rate except for the ‘Return after operating charges’ which is calculated as a percentage of the opening net asset value per share (NAV per share).
‘Operating charges’ and ‘Direct transaction costs’ are calculated as a percentage of average net asset value. Where there is a change in the charging structure, you may see variances in the ‘operating charges’ between the comparative and current year figures.
The closing NAV per share shown may diverge from the highest and lowest share prices (used for dealing purposes) as at the balance sheet date due to accounting and valuation adjustments.
M&G Corporate Bond Fund
Financial highlights
30 Annual report and audited financial statements • June 2026
Page 33
Sterling Class ‘A’ Income shares The share class was launched on 15 April 1994.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 33.59 33.71 32.00
Return before operating charges*
1.55 1.79 3.58
Operating charges (0.28) (0.28) (0.28)
Return after operating charges*
1.27 1.51 3.30
Distributions (1.68) (1.63) (1.59)
Closing NAV 33.18 33.59 33.71 *after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 3.78 4.48 10.31
Other information Closing NAV (£’000) 231,949 253,619 274,841
Number of shares 699,018,079 755,021,130 815,277,946 Operating charges (%) 0.83 0.83 0.83 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 34.34 35.02 35.18 Lowest share price (UK p) 32.60 32.57 31.64
Sterling Class ‘A’ Accumulation shares The share class was launched on 15 April 1994.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 75.96 72.64 65.79
Return before operating charges*
3.57 3.94 7.43
Operating charges (0.64) (0.62) (0.58)
Return after operating charges*
2.93 3.32 6.85
Distributions (3.24) (2.96) (2.76) Retained distributions 3.24 2.96 2.76
Closing NAV 78.89 75.96 72.64
*after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 3.86 4.57 10.41
Other information Closing NAV (£’000) 128,490 141,376 151,013 Number of shares 162,872,790 186,128,991 207,887,984 Operating charges (%) 0.83 0.83 0.83 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 79.59 76.14 73.35
Lowest share price (UK p) 75.18 72.53 65.04
M&G Corporate Bond Fund
Financial highlights
Annual report and audited financial statements • June 2026 31
Page 34
Sterling Class ‘I’ Income shares The share class was launched on 2 July 2007.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 35.00 34.99 33.08
Return before operating charges*
1.63 1.86 3.71
Operating charges (0.15) (0.15) (0.15)
Return after operating charges*
1.48 1.71 3.56
Distributions (1.76) (1.70) (1.65)
Closing NAV 34.72 35.00 34.99 *after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 4.23 4.89 10.76
Other information Closing NAV (£’000) 232,133 281,750 293,334
Number of shares 668,655,529 804,921,493 838,398,997 Operating charges (%) 0.43 0.43 0.43 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 35.88 36.38 36.44 Lowest share price (UK p) 34.09 33.91 32.71
Sterling Class ‘I’ Accumulation shares The share class was launched on 2 July 2007.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 81.98 78.10 70.44
Return before operating charges*
3.87 4.23 7.98
Operating charges (0.36) (0.35) (0.32)
Return after operating charges*
3.51 3.88 7.66
Distributions (3.83) (3.51) (3.26) Retained distributions 3.83 3.51 3.26
Closing NAV 85.49 81.98 78.10
*after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 4.28 4.97 10.87
Other information Closing NAV (£’000) 286,910 330,258 380,470 Number of shares 335,604,363 402,844,074 487,179,085 Operating charges (%) 0.43 0.43 0.43 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 86.13 82.18 78.85
Lowest share price (UK p) 81.20 78.09 69.65
M&G Corporate Bond Fund
Financial highlights
32 Annual report and audited financial statements • June 2026
Page 35
Sterling Class ‘M’ Income shares The share class was launched on 24 September 2024.
for the year/period to 30 June 2026 2025 Change in NAV per share UK p UK p Opening NAV 98.53 100.00
Return before operating charges*
4.58 2.35
Operating charges (0.23) (0.17)
Return after operating charges*
4.35 2.18
Distributions (4.96) (3.65)
Closing NAV 97.92 98.53 *after direct transaction cost of
0.00 0.00
Performance Return after charges (%) 4.41 2.18
Other information Closing NAV (£’000) 10 10
Number of shares 10,005 10,005 Operating charges (%) 0.23 0.23 Direct transaction costs (%) 0.00 0.00
Prices Highest share price (UK p) 101.13 100.33 Lowest share price (UK p) 96.12 95.40
Sterling Class ‘M’ Accumulation shares The share class was launched on 24 September 2024.
for the year/period to 30 June 2026 2025 Change in NAV per share UK p UK p Opening NAV 102.25 100.00
Return before operating charges*
4.85 2.43
Operating charges (0.24) (0.18)
Return after operating charges*
4.61 2.25
Distributions (5.02) (3.52) Retained distributions 5.02 3.52
Closing NAV 106.86 102.25
*after direct transaction cost of
0.00 0.00
Performance Return after charges (%) 4.51 2.25
Other information Closing NAV (£’000) 11 10 Number of shares 10,000 10,000 Operating charges (%) 0.23 0.23 Direct transaction costs (%) 0.00 0.00
Prices Highest share price (UK p) 107.58 102.49
Lowest share price (UK p) 101.31 97.36
M&G Corporate Bond Fund
Financial highlights
Annual report and audited financial statements • June 2026 33
Page 36
Sterling Class ‘PP’ Income shares The share class was launched on 5 August 2019.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 83.92 83.80 79.15
Return before operating charges*
3.90 4.47 8.87
Operating charges (0.28) (0.28) (0.27)
Return after operating charges*
3.62 4.19 8.60
Distributions (4.22) (4.07) (3.95)
Closing NAV 83.32 83.92 83.80 *after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 4.31 5.00 10.87
Other information Closing NAV (£’000) 139,131 151,562 152,322
Number of shares 166,991,382 180,602,281 181,779,215 Operating charges (%) 0.33 0.33 0.33 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 86.08 87.14 87.23 Lowest share price (UK p) 81.79 81.28 78.27
Sterling Class ‘PP’ Accumulation shares The share class was launched on 8 April 2019.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 110.51 105.10 94.72
Return before operating charges*
5.15 5.77 10.71
Operating charges (0.37) (0.36) (0.33)
Return after operating charges*
4.78 5.41 10.38
Distributions (5.28) (4.83) (4.48) Retained distributions 5.28 4.83 4.48
Closing NAV 115.29 110.51 105.10
*after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 4.33 5.15 10.96
Other information Closing NAV (£’000) 103,921 61,509 9,199 Number of shares 90,137,046 55,662,000 8,753,190 Operating charges (%) 0.33 0.33 0.33 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 116.12 110.71 106.11
Lowest share price (UK p) 109.42 105.10 93.65
M&G Corporate Bond Fund
Financial highlights
34 Annual report and audited financial statements • June 2026
Page 37
Sterling Class ‘R’ Income shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 91.46 91.65 86.87
Return before operating charges*
4.23 4.88 9.73
Operating charges (0.62) (0.63) (0.62)
Return after operating charges*
3.61 4.25 9.11
Distributions (4.59) (4.44) (4.33)
Closing NAV 90.48 91.46 91.65 *after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 3.95 4.64 10.49
Other information Closing NAV (£’000) 6,813 7,936 8,688
Number of shares 7,529,865 8,676,585 9,479,841 Operating charges (%) 0.68 0.68 0.68 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 93.59 95.23 95.58 Lowest share price (UK p) 88.87 88.65 85.89
Sterling Class ‘R’ Accumulation shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 142.39 135.97 122.96
Return before operating charges*
6.71 7.37 13.90
Operating charges (0.99) (0.95) (0.89)
Return after operating charges*
5.72 6.42 13.01
Distributions (6.29) (5.75) (5.35) Retained distributions 6.29 5.75 5.35
Closing NAV 148.11 142.39 135.97
*after direct transaction cost of
0.00 0.00 0.00
Performance Return after charges (%) 4.02 4.72 10.58
Other information Closing NAV (£’000) 12,527 13,825 14,189 Number of shares 8,457,764 9,709,111 10,434,895 Operating charges (%) 0.68 0.68 0.68 Direct transaction costs (%) 0.00 0.00 0.00
Prices Highest share price (UK p) 149.35 142.73 137.29
Lowest share price (UK p) 140.97 135.87 121.57
M&G Corporate Bond Fund
Financial highlights
Annual report and audited financial statements • June 2026 35
Page 38
Statement of total return
for the year to 30 June 2026 2025
Note £’000 £’000 £’000 £’000 Income Net capital gains/(losses) 3 (5,058) 5,790
Revenue 5 59,932 61,312 Expenses 6 (6,479) (7,046) Interest payable and similar charges 0 (2)
Net revenue/(expense) before taxation 53,453 54,264 Taxation 7 0 0 Net revenue/(expense) after taxation 53,453 54,264
Total return before distributions 48,395 60,054 Distributions 8 (57,123) (58,303)
Change in net assets attributable to shareholders from investment activities
(8,728) 1,751
Statement of change in net assets attributable to shareholders
for the year to 30 June 2026 2025
£’000 £’000 £’000 £’000 Opening net assets attributable to shareholders 1,241,855 1,284,056 Amounts received on issue of shares 73,011 123,689 Amounts paid on cancellation of shares (188,283) (191,201) (115,272) (67,512)
Dilution adjustments 0 32 Change in net assets attributable to shareholders from investment activities (see above)
(8,728) 1,751
Retained distributions on Accumulation shares 24,019 23,505 Unclaimed distributions 21 23
Closing net assets attributable to shareholders 1,141,895 1,241,855
M&G Corporate Bond Fund
Financial statements and notes
Financial statements
36 Annual report and audited financial statements • June 2026
Page 39
Balance sheet
as at 30 June Note 2026 2025 £’000 £’000
Assets Fixed assets Investments 1,053,036 1,160,336 Current assets Debtors 9 35,983 48,315 Cash and bank balances 10 18,265 27,589 Cash equivalents 50,064 25,498 Total assets 1,157,348 1,261,738 Liabilities
Investment liabilities (1,321) (290)
Creditors Bank overdrafts (4,412) 0
Overdrawn positions at futures clearing houses and collateral manager
(285) (1,904)
Distribution payable (7,957) (8,549)
Other creditors 11 (1,478) (9,140)
Total liabilities (15,453) (19,883)
Net assets attributable to shareholders 1,141,895 1,241,855
M&G Corporate Bond Fund
Financial statements and notes
Financial statements
Annual report and audited financial statements • June 2026 37
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Notes to the financial statements
1 Accounting policies The financial statements have been prepared in accordance with the ‘Summary of significant accounting policies’ set out on pages 9 to 12.
2 Distribution policy In determining the amount available for distribution to Income shares, the annual charge is offset against capital, increasing the amount available for distribution whilst restraining capital performance to an equivalent extent.
3 Net capital gains/(losses)
for the year to 30 June 2026 2025 £’000 £’000 Non-derivative securities (6,733) (922)
Derivative contracts 1,768 6,822 Currency gains/(losses) (93) (110)
Net capital gains/(losses) (5,058) 5,790
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4 Portfolio transactions and associated costs The following tables show portfolio transactions and their associated transaction costs. For more information about the nature of the costs please see the sections on ‘Operating charges’ and ‘Portfolio transaction costs’ within ‘Notes to the financial statements’ on pages 11 and 12. Total direct portfolio transaction costs are stated before dilution adjustments.
for the year to 30 June 2026 £’000
% of transaction
2025 £’000
% of transaction a) Purchases Debt securities 617,875 705,522 b) Sales Debt securities 711,086 763,038 Other transaction types Corporate actions 9,628 0 Total sales 720,714 763,038 2026 £’000
% of average NAV
2025 £’000
% of average NAV c) Direct portfolio transaction costs Commissions paid Derivatives 6 0.00 5 0.00 Taxes and other fees paid Derivatives 7 0.00 5 0.00 Total direct portfolio transaction costs 13 0.00 10 0.00 %% d) Indirect portfolio transaction costs Average portfolio dealing spread as at the balance sheet date 0.42 0.49
5 Revenue
for the year to 30 June 2026 2025 £’000 £’000 Bank interest 30 46 Derivative revenue 358 573 Interest distributions 1,681 2,446 Interest on debt securities 57,846 58,222 Rebate of ongoing charges from underlying funds 17 25
Total revenue 59,932 61,312
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6 Expenses
for the year to 30 June 2026 2025 £’000 £’000 Payable to the ACD or associate Annual charge 6,479 7,046
Total expenses 6,479 7,046
Audit fees for the financial year ending 2026 were £14,000 (2025: £13,000) (including VAT), which are covered by the annual charge.
7 Taxation
for the year to 30 June 2026 2025 £’000 £’000 a) Analysis of charge in the year
Corporation tax 00 Withholding tax 00 Deferred tax (note 7c) 00 Total taxation 00 b) Factors affecting taxation charge for the year Net revenue/(expense) before taxation 53,453 54,264 Corporation tax at 20% 10,691 10,853 Effects of:
Interest distributions (10,691) (10,853)
Total tax charge (note 7a) 00 c) Provision for deferred taxation
Provision at the start of the year 00 Deferred tax in profit and loss account (note 7a) 0 0
Provision at the end of the year 00 The fund has not recognised a deferred tax asset in the current financial year (2025: same).
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8 Distributions For each distribution period, the distributions payable on Income shares (Inc) and distributions retained on Accumulation shares (Acc) are disclosed.
for the year to 30 June 2026 2025 Inc Acc Inc Acc Interest distributions £’000 £’000 £’000 £’000 First interim 8,301 5,979 8,825 5,911 Second interim 8,239 5,999 8,591 5,863 Third interim 7,776 5,864 8,499 5,792 Final 7,957 6,177 8,549 5,939 Total net distributions 56,292 57,969 Income deducted on cancellation of shares 1,249 1,329
Income received on issue of shares (418) (995)
Distributions 57,123 58,303
Net revenue/(expense) per statement of total return 53,453 54,264 Expenses offset against capital 3,669 4,040 Undistributed income brought forward 10 Undistributed income carried forward 0 (1)
Distributions 57,123 58,303
9 Debtors
as at 30 June 2026 2025 £’000 £’000 Amounts receivable on issues of shares 8,814 28,116 Currency deals outstanding 0 928 Debt security interest receivable 18,966 18,733 Distributions receivable 143 171 Rebate of ongoing charges from underlying funds 1 1 Sales awaiting settlement 8,059 366
Total debtors 35,983 48,315
10 Cash and bank balances
as at 30 June 2026 2025 £’000 £’000 Amounts held at futures clearing houses and collateral manager 493 15,436 Cash held as bank balances 17,772 12,153
Total cash and bank balances 18,265 27,589
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11 Other creditors
as at 30 June 2026 2025 £’000 £’000 Amounts payable on cancellation of shares 1,105 7,821 Annual charge payable 373 391 Currency deals outstanding 0 928
Total other creditors 1,478 9,140
12 Contingent assets, liabilities and outstanding commitments There were no contingent assets, liabilities or outstanding commitments at the balance sheet date (2025: same).
13 Shares in issue The following table shows each class of share in issue during the year. Each share class has the same rights on winding up however they may have different charging structures as set out in note 14.
Share class Opening Movements Closing 01.07.25 Issued Cancelled Converted 30.06.26
Sterling Class ‘A’ Income 755,021,130 18,939,682 (74,942,733) 0 699,018,079
Class ‘A’ Accumulation 186,128,991 2,106,221 (25,362,422) 0 162,872,790 Class ‘I’ Income 804,921,493 37,231,198 (173,497,162) 0 668,655,529 Class ‘I’ Accumulation 402,844,074 8,954,509 (76,194,220) 0 335,604,363 Class ‘M’ Income 10,005 0 0 0 10,005
Class ‘M’ Accumulation 10,000 0 0 0 10,000 Class ‘PP’ Income 180,602,281 4,808,309 (18,419,208) 0 166,991,382 Class ‘PP’ Accumulation 55,662,000 35,384,031 (908,985) 0 90,137,046
Class ‘R’ Income 8,676,585 367,995 (1,514,715) 0 7,529,865 Class ‘R’ Accumulation 9,709,111 306,362 (1,557,709) 0 8,457,764
It is not possible to separately identify all share class conversions. As a result, the share class movements (issued/cancelled) as disclosed in the t able above may also include share class conversions.
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42 Annual report and audited financial statements • June 2026
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14 Charging structure The table below sets out the charging structure for each class of share. The charging structure is the same for both Income and Accumulation shares of each class. The amounts shown are the maximum annual charge. M&G will apply a discount of 0.02% for every £1 billion of a fund’s net asset value. This is assessed quarterly and implemented on a forward basis no later than 13 business days after quarter end.
Share class Annual charge % Sterling Class ‘A’ 0.85 Class ‘I’ 0.45 Class ‘M’ 0.25 Class ‘PP’ 0.35 Class ‘R’ 0.70
15 Related parties M&G Securities Limited, as Authorised Corporate Director (ACD), is a related party and acts as principal on all the transactions of shares in the fund except with in specie transactions, where M&G Securities Limited acts as an agent. The aggregate monies received through issues, and paid on cancellations, are disclosed in the ‘Statement of change in net assets attributable to shareholders’ and note 8. Amounts due to/from M&G Securities Limited in respect of share transactions at the year end are disclosed in notes 9 and 11 where applicable.
Amounts paid to M&G Securities Limited in respect of the annual charge are disclosed in note 6. Amounts due at the year end in respect of the annual charge are disclosed in note 11.
Amounts paid to M&G Securities Limited in respect of rebate arrangements for the annual charge are disclosed in notes 3 and 5. Amounts due at the year end from the ACD, and/or associate, in respect of these rebates are disclosed in note 9.
At the balance sheet date, entities within M&G plc, of which M&G Securities Limited is a wholly owned subsidiary, held in aggregate 5.57% (2025: 5.36%) of the net asset value of the fund.
16 Fair value analysis Financial instruments have been measured at their fair value and have been classified below using a hierarchy that reflects the significance of the inputs used in measuring their fair value:
Level 1: Unadjusted quoted price in an active market for an identical instrument This includes instruments such as publicly traded equities, highly liquid bonds (eg Government bonds) and exchange traded derivatives (eg futures) for which quoted prices are readily and regularly available.
Level 2: Valuation technique using observable market data This includes instruments such as over-the-counter (OTC) derivatives, debt securities, convertible bonds, mortgage-backed securities, asset-backed securities and open-ended funds which have been valued using models with observable market data inputs.
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Level 3: Valuation technique using unobservable inputs This refers to instruments which have been valued using models with unobservable data inputs. This includes single broker-priced instruments, suspended/unquoted securities, private equity, unlisted closed-ended funds and open-ended funds with restrictions on redemption rights.
as at 30 June Assets 2026
Liabilities 2026
Assets 2025
Liabilities 2025 Basis of valuation £’000 £’000 £’000 £’000 Level 1 93,167 0 132,811 (84)
Level 2 959,869 (1,321) 1,026,609 (206) Level 3 0 0 916 0 1,053,036 (1,321) 1,160,336 (290)
2025: Level 3 assets comprise of Intu Metrocentre 1% 04/12/2025.
17 Risk management policies The general risk management policies for the fund are set out in note 3 to the financial statements on pages 12 to 15.
18 Market risk sensitivity and exposure VaR is the risk measurement methodology used to assess the fund’s leverage and market risk volatility. When VaR is calculated as a percentage of the net asset value it may not be greater than the VaR limit set for the fund.
The VaR limit set during the financial year to 30 June 2026 was 200% (2025: 200%).
The lowest, highest and average utilisation of VaR with reference to the limit above are calculated during the financial years ended 30 June 2026 and 30 June 2025.
for the year to 30 June 2026 Utilisation of VaR 200%
2025 Utilisation of VaR 200% Lowest 55.62 50.65 Highest 62.80 62.03 Average 59.66 56.75
19 Credit risk The fund is exposed to credit risk both through the credit quality of the investments it holds and through the derivative positions with counterparties. The table below shows the credit quality of the investments held in the portfolio.
as at 30 June 2026 2025 £’000 £’000 Investment grade securities 1,052,115 1,153,059 Below investment grade securities 0 5,010 Other investments (400) 1,977
Total 1,051,715 1,160,046
The credit ratings are provided by S&P, followed by Moody’s, and finally Fitch.
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The tables below show the exposure to counterparties. Collateral is posted daily, in the form of cash or high-quality government bonds, to minimise this exposure.
as at 30 June 2026 Swaps £’000
Forwards £’000
Futures £’000 Bank of America Merrill Lynch 0 (5) 340
Barclays Bank (108) 2 0
BNP Paribas 0 (739) 0
Citigroup 0 (1) 0 JPMorgan 0 107 0 Standard Chartered Bank 0 40 Total (108) (632) 340
At the balance sheet date cash collateral of £1,060,000 (2025: £nil) and stock collateral of £nil (2025: £nil) was held by the fund in respect of forward currency contracts.
as at 30 June 2025 Swaps £’000
Forwards £’000
Futures £’000
Bank of America Merrill Lynch 0 0 (9)
Barclays Bank 2,007 0 0 BNP Paribas 0 183 0 HSBC 0 20 JPMorgan 0 (205) 0 State Street Bank 0 (1) 0
Total 2,007 (21) (9)
20 Leverage risk Funds using VaR approaches are required to disclose the level of leverage employed during the financial reporting period.
Derivatives can be used by the fund to generate market exposure to investments exceeding the net asset value. As a result of this exposure, the size of any positive or negative movement in markets may have a more significant effect on the net asset value of the fund.
The lowest, highest and average level of leverage employed and utilisation of the leverage level calculated during the financial years ended 30 June 2026 and 30 June 2025 are disclosed in the table below. Leverage has been calculated using the Gross Sum of Notional Approach for derivative positions only (including forward currency contracts) and excludes all physical holdings. Percentages are expressed with reference to fund valuation.
for the year to 30 June 2026 £’000
2026 %
2025 £’000
2025 % Lowest 104,596 8.57 117,942 9.52 Highest 366,336 32.02 404,128 32.65 Average 166,682 13.99 187,719 14.79
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21 Interest distribution tables This fund pays quarterly interest distributions and the following table sets out the distribution periods.
Quarterly distribution periods
Start End Xd Payment First interim 01.07.25 30.09.25 01.10.25 30.11.25 Second interim 01.10.25 31.12.25 02.01.26 28.02.26 Third interim 01.01.26 31.03.26 01.04.26 31.05.26 Final 01.04.26 30.06.26 01.07.26 31.08.26
The following tables set out for each distribution the rates per share for both Group 1 and Group 2 shares.
Group 1 shares are those purchased prior to a distribution period and therefore their income rate is the same as the distribution rate.
Group 2 shares are those purchased during a distribution period and therefore their distribution rate is made up of income and equalisation. Equalisation is the average amount of income included in the purchase price of all Group 2 shares and is refunded to the holders of these shares as a return of capital. Being capital it is not liable to Income Tax. Instead, it must be deducted from the cost of shares for Capital Gains Tax purposes. The tables below show the split of the Group 2 rates into the income and equalisation components.
Sterling Class ‘A’ Income shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.1562 0.2602 0.4164 0.4112 Second interim 0.1550 0.2652 0.4202 0.4045 Third interim 0.1551 0.2590 0.4141 0.4025 Final 0.1680 0.2649 0.4329 0.4134
Sterling Class ‘A’ Accumulation shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p
First interim 0.4200 0.3625 0.7825 0.7275 Second interim 0.4496 0.3497 0.7993 0.7268 Third interim 0.3888 0.4103 0.7991 0.7364 Final 0.4213 0.4339 0.8552 0.7690
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Sterling Class ‘I’ Income shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.2812 0.1530 0.4342 0.4270 Second interim 0.2735 0.1649 0.4384 0.4204 Third interim 0.1869 0.2457 0.4326 0.4188 Final 0.2190 0.2338 0.4528 0.4306
Sterling Class ‘I’ Accumulation shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.5993 0.3285 0.9278 0.8647 Second interim 0.4949 0.4537 0.9486 0.8629 Third interim 0.5062 0.4421 0.9483 0.8724 Final 0.4533 0.5569 1.0102 0.9099
Sterling Class ‘M’ Income shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 1.2200 0.0000 1.2200 n/a
Second interim 1.2349 0.0000 1.2349 1.2595 Third interim 1.2214 0.0000 1.2214 1.1783 Final 1.2805 0.0000 1.2805 1.2134
Sterling Class ‘M’ Accumulation shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 1.2111 0.0000 1.2111 n/a
Second interim 1.2422 0.0000 1.2422 1.1917 Third interim 1.2450 0.0000 1.2450 1.1409 Final 1.3232 0.0000 1.3232 1.1909
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Sterling Class ‘PP’ Income shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.5200 0.5210 1.0410 1.0230 Second interim 0.5315 0.5202 1.0517 1.0071 Third interim 0.4566 0.5811 1.0377 1.0037 Final 0.4655 0.6209 1.0864 1.0323
Sterling Class ‘PP’ Accumulation shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 1.0682 0.2100 1.2782 1.1914 Second interim 0.5657 0.7413 1.3070 1.1889 Third interim 0.5616 0.7450 1.3066 1.2015 Final 0.3361 1.0543 1.3904 1.2526
Sterling Class ‘R’ Income shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.3787 0.7553 1.1340 1.1184 Second interim 0.5048 0.6399 1.1447 1.1000 Third interim 0.4067 0.7217 1.1284 1.0954 Final 0.4876 0.6928 1.1804 1.1255
Sterling Class ‘R’ Accumulation shares
Interest distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.8268 0.6943 1.5211 1.4156 Second interim 0.9948 0.5596 1.5544 1.4137 Third interim 1.0602 0.4935 1.5537 1.4312 Final 0.7817 0.8781 1.6598 1.4936
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22 Events after the balance sheet date There were no events after the balance sheet date to disclose.
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For the purposes of these financial statements, the Prospectus dated 9 June 2026 has been used.
Investment objective
The fund has three aims:
• To provide an annual yield higher than that of the FTSE All-Share Index;
• To provide an income stream that increases every year;
• To provide a higher total return (the combination of capital growth and income), net of the ongoing charge figure, than that of the FTSE All-Share Index over any five-year period.
Investment policy
At least 70% of the fund is invested in equity securities and equity-related securities of companies across any sector and market capitalisation, that are incorporated, domiciled, listed or do most of their business in the United Kingdom.
The fund may also invest in other transferable securities, including the shares of non-UK companies, cash and near cash directly or via collective investment schemes (including funds managed by M&G).
Derivatives may be used for efficient portfolio management and hedging.
Investment approach
The fund employs a disciplined approach to investment which concentrates on the analysis and selection of individual companies. The fund typically invests in a well-diversified portfolio of high yielding UK stocks. The yield premium attached to the fund generally means that there is a bias towards good value, out of favour stocks (ie those stocks which the fund manager considered to be undervalued by the market). The emphasis on yield helps to identify stocks that are relatively cheap and to avoid those that are expensive. From the universe of high yielding stocks, the fund
manager identifies companies that are competitive, with a strong business franchise and that have attractive dividend growth prospects.
Benchmark
FTSE All-Share Index
The benchmark is a target which the fund seeks to outperform. The index has been chosen 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 does not constrain the fund’s portfolio construction.
The fund is actively managed.
The fund manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.
For each share class the benchmark will be denominated or hedged into the relevant share class currency. The benchmark for each share class will be shown in its respective KIID.
Risk profile
For details of the risks associated with this fund, please refer to the Prospectus. For details of the risk management policies, please refer to pages 12 to 15.
The following table shows the risk number associated with the fund and is based on Sterling Class ‘A’ shares.
Low risk High risk
Typically lower rewards Typically higher rewards
1234 5 67
The above number:
• is based on the rate at which the value of the fund has moved up and down in the past and is based on historical data so may not be a reliable indicator of the future risk profile of the fund.
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• is not guaranteed and may change over time and the lowest risk number does not mean risk free.
• has changed from 6 to 5 on 28 July 2025.
Investment review
For the year ended 30 June 2026
Performance against objective The fund achieved its objective of growing its income over the 12-month review period.
The first two interim distributions of 0.385 pence per Sterling Class ‘A’ Income share were declared during the review period, followed by a third interim of 0.98, and concluding with a final distribution of 1.8234p. This resulted in a total distribution over the year of 3.5734p, an increase of 5.1% on the previous year. The inflation rate in June 2026 was 3.1% as measured by the Retail Prices Index (RPI).
On 30 June 2026, the yield on the Sterling Class ‘A’ Income shares was 5.36%, 72.9% above the benchmark FTSE All-Share Index yield of 3.10%, meeting the fund’s objective to exceed the index yield.
Between 1 July 2025 (the start of the review period) and 30 June 2026, the fund registered a positive total return (the combination of income and capital growth) across all of its share classes. This was ahead of the FTSE All-Share Index, which returned 21.9% over the period.
Over five years, the fund delivered positive returns across all share classes but marginally lagged its benchmark, the FTSE All-Share Index, which returned 10.9% pa over the period. Therefore, the fund did not deliver on its objective of outperforming the benchmark over this period. For the performance of each share class, please refer to the ‘Longterm performance by share class’ table in the ‘Financial highlights’ section of this report.
Performance review The UK market posted another year of positive returns, extending its gains despite persistent market volatility as geopolitical and macroeconomic pressures remained elevated. Economic data improved as inflation peaked
in the summer of 2025. This allowed the Bank of England to cut interest rates twice by 0.25 percentage points before the end of the year.
The UK equity market gains were supported by investors rotating out of US equities amid concerns of an artificial intelligence (AI) bubble and tariff-related volatility, alongside a steady stream of takeover activity in the UK market. The perceived risk that AI could disrupt some software and data-rich companies drove a rotation into heavy asset companies with a lower risk of obsolescence, an area where the UK market is well positioned to benefit, given its sector composition. Depressed UK valuations continued to attract corporate buyers and private equity funds, keeping the M&A (mergers and acquisitions) pipeline active. Volatility was not in short supply, both domestically, amid political upheaval - subsequently eased following the appointment of Andy Burnham as Prime Minister - and internationally, with the US-Iran conflict adding an unwelcome layer of geopolitical uncertainty.
Against this backdrop, the FTSE All-Share Index returned 21.9% over the period. Large cap companies led the charge in the second half of the period, supported by their international exposure and defensive characteristics during a time of heightened uncertainty. Mid cap companies also performed well but went up less than the FTSE 100 as concerns about inflation, domestic political uncertainty and expectations that interest rates would remain higher for longer weighed on the performance of the FTSE 250. For income-focused investors, we believe the UK remains a compelling opportunity, offering a combination of relatively high dividend yields, resilient businesses at attractive valuations and some downside protection due to its defensive characteristics.
The fund’s positive returns relative to the benchmark were supported by several factors. The fund’s lower exposure (underweight) to the technology sector and technology related businesses such as RELX and LSEG (London Stock Exchange Group) supported performance, as these areas of the market fell significantly during the period. This reflected investor concerns that advances in AI could disrupt some
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business models that rely heavily on data and intellectual property rather than physical assets.
The fund’s holding in Rio Tinto contributed positively to performance, with the company benefiting from higher commodity prices and improving sentiment towards copper, an essential commodity used in both the energy transition and the expansion of AI related infrastructure. This supported earnings and shareholder returns.
The holding in British American Tobacco performed well, supported by its defensive characteristics, strong cash generation, and reliable dividend yield, which remained attractive to investors seeking income during a period of heightened market uncertainty. In addition, the company benefited from favourable regulatory developments in the US, where it generates a significant portion of its revenue, further improving investor sentiment.
In addition, the fund’s higher exposure to (overweight), and stock selection within the financial sector (including Lloyds Banking and IG), also contributed to positive returns over the period. Lloyds benefited from an interest rate environment that helped profitability, while IG was supported by increased market volatility, which drove higher trading activity on its platform.
Investment activities The fund remained active over the review period as we recycled capital from holdings where yields had fallen into higher yielding opportunities that in our view, offered more attractive valuations and stronger potential for capital growth.
Purchases of note included RELX, a UK-based global provider of information analytics and decision making tools for professionals spanning across risk, scientific, technical and medical, legal and exhibitions markets. The shares were available at an attractive valuation largely due to concerns about the potential impact of AI related concerns but we think these fears are overstated, and that the recent fall in the share price has created a clear opportunity for the fund to enter a high-quality FTSE 100 name at a discount but with long term growth potential, while also offering a reasonable source of income through its dividend.
The fund also initiated a position in Bluenord, a Norwegian oil and gas company operating the second largest producing assets in the Danish North Sea. The position was initiated following several meetings with the management team. The business is already returning a significant amount of income to shareholders and higher commodity prices could help sustain attractive dividend yields for longer. We believe the risk-reward profile remains compelling, supported by continued operational and financial improvements and ongoing efforts to reduce debt. After the period end the company announced it was being taken over by Var Energi which is also held in the fund.
Another purchase was Tate & Lyle, a specialist food and beverage solutions business benefiting from long-term growth in healthier nutrition ingredients. Its attractive and sustainable dividend yield, combined with a recent share price pullback, offered the potential for both income and capital growth. In June 2026, the Tate & Lyle Board recommended an all-cash offer from its US listed peer, Ingredion.
Other purchases during the review period included promotional products distributor 4imprint, self-storage business Big Yellow, software and cloud solutions provider Bytes Technology, manufacturer of sustainable water, climate and ventilation solutions Genuit, independent oil and gas producer Harbour Energy, generics pharmaceuticals manufacturer Hikma Pharmaceuticals, specialist banking group Paragon Banking, UK housebuilder Persimmon and water utility company United Utilities.
Turning to sales the fund switched its exposure within housebuilding, selling Taylor Wimpey and acquiring a position in Persimmon, one of the UK’s largest housebuilders with a nationwide presence across the residential property market. Shares in companies have remained under pressure following a prolonged period of weakness in the UK housing market, driven by higher interest rates and affordability constraints. However, we believe the investment case for Persimmon is slightly more attractive, with the company trading at a compelling valuation, supported by an attractive dividend yield. In our view, any kind of normalisation in
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housing market conditions, together with support from the UK government’s ambitious housebuilding targets, could provide scope for a re-rating of the shares.
Other holdings that were sold from the fund in the period included Anglo American, B&M European Value Retail, BAE Systems, Informa, Pagegroup, Pets at Home, QinetiQ, Regional REIT, SDCL Efficiency Income Trust, STV, Tesco and Watkin Jones.
Outlook Looking ahead, we remain constructive on the relative attractiveness of UK equities, particularly given their global revenue exposure (with around 75% of FTSE 100 revenues generated overseas), attractive valuations and resilience amid heightened geopolitical uncertainty. The indirect effects of this uncertainty on global energy prices and supply chains have yet to be fully felt, and we remain alert to the knock-on effects for UK listed companies.
Domestically, Keir Starmer announced his resignation as leader of the Labour Party, introducing an additional layer of political uncertainty. However, the recent appointment of Andy Burnham has provided some near term stability. Despite this backdrop, we believe UK markets are well placed to perform over the next 12-months given their defensive sector composition, lower exposure to technology relative to other developed markets and, most importantly, their attractive starting valuations.
In this dynamic environment, we remain anchored in our disciplined, dividend led investment approach, which we believe offers investors a reliable stream of income alongside the potential for capital growth. We believe the fund is well balanced to navigate the near term challenges whilst capturing long term opportunities.
Michael Stiasny Fund manager
An employee of M&G FA Limited, which is an associate of M&G Securities Limited. Please note that the views expressed in this Report should not be taken as a recommendation or advice on how the fund or any holding mentioned in the Report is likely to perform. If you wish to obtain financial advice as to whether an investment is suitable for your needs, you should consult a Financial Adviser.
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Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 %
Equities 882,023 101.83 102.07 Banks 142,423 16.44 13.79 5,580,000 HSBC Holdings PLC 80,765 9.32 32,063,667 Lloyds Banking Group PLC 35,687 4.12 3,434,866 NatWest Group PLC 22,917 2.65
394,000 Paragon Banking Group PLC 3,054 0.35 Basic resources 42,216 4.87 6.76 1,750,600 Central Asia Metals PLC a 2,332 0.27 2,213,665 Kenmare Resources PLC 4,210 0.48 455,833 Rio Tinto PLC 33,012 3.81 133,619 UPM-Kymmene OYJ 2,662 0.31
Chemicals 5,584 0.64 0.89 971,085 Victrex PLC 5,584 0.64
Construction and materials 12,295 1.42 1.42 1,005,000 Genuit Group PLC 2,812 0.33 2,280,000 Kier Group PLC 4,966 0.57 2,075,000 Marshalls PLC 3,137 0.36 4,028,626 Severfield PLC 1,380 0.16
Consumer products and services 13,746 1.59 1.32 285,000 Compass Group PLC 7,009 0.81 632,000 Persimmon PLC 6,737 0.78
Energy 90,152 10.41 9.54 107,966 Bluenord ASA 4,115 0.47 6,500,000 BP PLC 30,625 3.54 741,318 Diversified Energy Co. 7,539 0.87
2,005,319 Harbour Energy PLC 4,303 0.50 1,360,000 Shell PLC 39,596 4.57 1,275,000 Var Energi ASA 3,974 0.46
Financial services 59,577 6.88 8.09 5,460,000 Aberdeen Group PLC 13,071 1.51 3,587,658 Ashmore Group PLC 7,247 0.84 18,952,700 Duke Capital Ltd. a 4,928 0.57 1,835,000 Hicl Infrastructure PLC 2,441 0.28
M&G Dividend Fund
Portfolio statement
Investments
54 Annual report and audited financial statements • June 2026
Page 57
Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Equities (continued) Financial services (continued)
164,000 ICG PLC 2,776 0.32 560,000 IG Group Holdings PLC 10,287 1.19 1,352,394 Impax Asset Management Group PLC a 1,316 0.15 14,000 London Stock Exchange Group PLC 1,151 0.13 1,286,000 OSB Group PLC 6,726 0.78 957,000 Pollen Street Group Ltd. 7,953 0.92 4,424,363 Premier Miton Group PLC a 1,681 0.19
Food, beverage and tobacco 107,293 12.39 11.48 1,268,000 British American Tobacco PLC 60,230 6.96 1,375,400 Imperial Brands PLC 38,745 4.47 1,500,000 Tate & Lyle PLC 8,318 0.96
Health care 79,088 9.13 7.81 294,961 AstraZeneca PLC 42,793 4.94 1,626,900 GSK PLC 32,538 3.76 244,914 Hikma Pharmaceuticals PLC 3,757 0.43
Industrial goods and services 19,412 2.24 3.89 8,962,000 Pacific Basin Shipping Ltd. 2,324 0.27 1,179,100 RWS Holdings PLC a 849 0.10 6,791,100 Smiths News PLC 4,795 0.55 2,748,028 Taylor Maritime Ltd. 1,599 0.18 2,182,000 Vesuvius PLC 9,845 1.14
Insurance 117,793 13.60 11.70 298,000 Admiral Group PLC 10,645 1.23 2,495,000 Aviva PLC 16,267 1.88 5,100,000 Chesnara PLC 17,008 1.96 1,605,000 Conduit Holdings Ltd. 7,584 0.88
1,244,000 Lancashire Holdings Ltd. 8,042 0.93 7,560,864 Legal & General Group PLC 21,768 2.51 4,690,000 Sabre Insurance Group PLC 8,123 0.94 3,400,000 Standard Life PLC 28,356 3.27
M&G Dividend Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 55
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Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Equities (continued)
Media 31,223 3.60 3.49 213,000 4imprint Group PLC 7,945 0.92 13,258,000 ITV PLC 10,772 1.24 12,412,898 Reach PLC 6,591 0.76
2,426,961 WPP PLC 5,915 0.68 Personal care, drug and grocery stores 9,130 1.05 2.57 122,000 Reckitt Benckiser Group PLC 6,034 0.69
67,731 Unilever PLC 3,096 0.36 Real estate 34,445 3.98 3.71
360,000 Big Yellow Group PLC 3,298 0.38 1,770,500 British Land Co. PLC 7,376 0.85 23,908,576 Grit Real Estate Income Group Ltd. 1,387 0.16 4,638,260 Home REIT PLC 457 0.06 1,005,000 Land Securities Group PLC 6,542 0.76 8,352,951 NewRiver REIT PLC 6,515 0.75 6,688,516 Primary Health Properties PLC 6,421 0.74
276,700 Segro PLC 2,449 0.28 Retail 13,988 1.62 2.11 3,730,078 Card Factory PLC 2,529 0.30
987,000 Dunelm Group PLC 7,891 0.91 1,896,000 Wickes Group PLC 3,568 0.41
Technology 21,029 2.43 0.85 2,152,000 Bytes Technology Group PLC 8,160 0.94 4,300,000 MONY Group PLC 8,020 0.93 204,000 RELX PLC 4,849 0.56
Telecommunications 14,865 1.72 2.78 6,795,822 BT Group PLC 13,218 1.53 2,909,500 Netlink NBN Trust 1,647 0.19
Travel and leisure 9,972 1.15 1.70 1,192,502 Entain PLC 6,931 0.80 1,100,000 Hollywood Bowl Group PLC 3,041 0.35
M&G Dividend Fund
Portfolio statement
Investments (continued)
56 Annual report and audited financial statements • June 2026
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Holding as at 30.06.26 £’000
as at 30.06.26 %
as at 30.06.25 % Equities (continued)
Utilities 57,792 6.67 8.17 750,736 Drax Group PLC 5,653 0.65 337,670 Engie SA 8,043 0.93 2,260,000 National Grid PLC 28,352 3.27
2,470,000 Pennon Group PLC 11,589 1.34 42,000 SSE PLC 1,033 0.12 237,932 United Utilities Group PLC 3,122 0.36 Total portfolio 882,023 101.83 102.07
Net other assets/(liabilities) (15,888) (1.83) (2.07)
Net assets attributable to shareholders 866,135 100.00 100.00
All securities are on an official stock exchange listing except where referenced. a AIM quoted.
M&G Dividend Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 57
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Top ten portfolio transactions for the year to 30 June 2026
Largest purchases £’000 Imperial Brands PLC 8,325 Bytes Technology Group PLC 8,247 4imprint Group PLC 7,488 Tate & Lyle PLC 7,068 Persimmon PLC 6,676
Compass Group PLC 6,652 Admiral Group PLC 6,138 Legal & General Group PLC 5,517 Harbour Energy PLC 4,963 Bluenord ASA 4,611 Other purchases 73,422
Total purchases 139,107
Largest sales £’000 British American Tobacco PLC 8,513 Lloyds Banking Group PLC 8,312 Rio Tinto PLC 8,304 Taylor Wimpey PLC 7,987
QinetiQ Group PLC 7,300 Imperial Brands PLC 7,172 Engie SA 6,875 Reckitt Benckiser Group PLC 6,620 AstraZeneca PLC 6,616 BT Group PLC 6,449
Other sales 108,060 Total sales 182,208
Purchases and sales exclude the cost and proceeds of ‘AAA’ rated money market funds.
M&G Dividend Fund
Portfolio statement
58 Annual report and audited financial statements • June 2026
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Fund performance
Please note past performance is not a guide to future performance and the value of investments, and the income from them, will fluctuate. This will cause the fund price to fall as well as rise and you may not get back the original amount you invested.
As different share classes have different attributes, for example charging structures and minimum investments, please be aware that their performance may be different.
For additional information, including monthly fund commentaries, fund facts, historic prices, distribution rates, performance information (including a range of performance graphs) and other documents, please visit our website at mandg.com/investments
Long-term performance by share class To give an indication of the performance of the fund, the following table shows the compound rate of return, per annum, over the period. Calculated on a price to price basis with income reinvested and shown as net of operating charge. Please refer to ‘Specific share class performance’ tables for the share class launch dates.
Share class One year % a
Three years % pa
Five years % pa
Ten years % pa Sterling Class ‘A’ Income +24.2 +16.6 +10.1 +7.0 Class ‘A’ Accumulation +24.2 +16.6 +10.1 +7.0 Class ‘C’ Income +25.6 +17.9 +11.3 +8.3 Class ‘I’ Income +24.7 +17.1 +10.5 +7.5 Class ‘I’ Accumulation +24.7 +17.1 +10.5 +7.5
Class ‘R’ Income +24.4 +16.8 +10.3 +7.3 Class ‘R’ Accumulation +24.4 +16.8 +10.3 +7.3
Benchmark +21.9 +15.3 +10.9 +8.7
a Not annualised.
Specific share class performance
The following comparative tables show the performance of each share class. All ‘Performance and charges’ percentages represent an annual rate except for the ‘Return after operating charges’ which is calculated as a percentage of the opening net asset value per share (NAV per share).
‘Operating charges’ and ‘Direct transaction costs’ are calculated as a percentage of average net asset value. Where there is a change in the charging structure, you may see variances in the ‘operating charges’ between the comparative and current year figures.
The closing NAV per share shown may diverge from the highest and lowest share prices (used for dealing purposes) as at the balance sheet date due to accounting and valuation adjustments.
M&G Dividend Fund
Financial highlights
Annual report and audited financial statements • June 2026 59
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Sterling Class ‘A’ Income shares The share class was launched on 6 May 1964.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 55.20 51.70 49.11
Return before operating charges*
13.90 7.49 6.48
Operating charges (0.68) (0.59) (0.58)
Return after operating charges*
13.22 6.90 5.90
Distributions (3.57) (3.40) (3.31)
Closing NAV 64.85 55.20 51.70 *after direct transaction cost of 0.05 0.04 0.04
Performance Return after charges (%) 23.95 13.35 12.01
Other information Closing NAV (£’000) 205,604 186,681 184,845 Number of shares 317,047,861 338,167,484 357,520,960 Operating charges (%) 1.10 1.10 1.17 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 67.85 57.35 54.72
Lowest share price (UK p) 54.95 48.40 47.81
Sterling Class ‘A’ Accumulation shares The share class was launched on 6 May 1964.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 945.17 831.92 741.36
Return before operating charges*
240.51 122.86 99.49
Operating charges (11.74) (9.61) (8.93)
Return after operating charges*
228.77 113.25 90.56
Distributions (50.28) (45.96) (42.30) Retained distributions 50.28 45.96 42.30
Closing NAV 1,173.94 945.17 831.92
*after direct transaction cost of 0.89 0.73 0.63 Performance Return after charges (%) 24.20 13.61 12.22
Other information Closing NAV (£’000) 78,595 65,725 64,329 Number of shares 6,694,943 6,953,856 7,732,610 Operating charges (%) 1.10 1.10 1.17 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 1,176.69 953.38 854.18 Lowest share price (UK p) 941.03 804.60 721.53
M&G Dividend Fund
Financial highlights
60 Annual report and audited financial statements • June 2026
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Sterling Class ‘C’ Income shares Sterling Class ‘C’ shares are not generally available to all investors. The share class was launched on 3 January 2006.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p
Opening NAV 73.07 67.67 63.57 Return before operating charges*
18.49 9.88 8.46
Operating charges 0.00 0.00 (0.05)
Return after operating charges*
18.49 9.88 8.41
Distributions (4.76) (4.48) (4.31)
Closing NAV 86.80 73.07 67.67
*after direct transaction cost of 0.07 0.06 0.05 Performance Return after charges (%) 25.30 14.60 13.23 Other information Closing NAV (£’000) 384,524 359,636 390,085 Number of shares 443,002,679 492,180,112 576,437,520 Operating charges (%) 0.00 0.00 0.07 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 90.46 75.88 71.53 Lowest share price (UK p) 72.74 63.91 61.98
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Financial highlights
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Sterling Class ‘I’ Income shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 1,142.15 1,065.35 1,007.94 Return before operating charges*
288.07 154.79 133.37
Operating charges (8.95) (7.75) (7.90)
Return after operating charges*
279.12 147.04 125.47
Distributions (74.10) (70.24) (68.06)
Closing NAV 1,347.17 1,142.15 1,065.35
*after direct transaction cost of 1.06 0.92 0.84 Performance Return after charges (%) 24.44 13.80 12.45
Other information Closing NAV (£’000) 101,749 86,466 81,161
Number of shares 7,552,764 7,570,381 7,618,210 Operating charges (%) 0.70 0.70 0.77 Direct transaction costs (%) 0.08 0.08 0.08 Prices Highest share price (UK p) 1,407.47 1,186.38 1,127.08 Lowest share price (UK p) 1,137.00 1,000.50 981.77
Sterling Class ‘I’ Accumulation shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 2,215.56 1,942.26 1,723.97 Return before operating charges*
564.91 287.60 232.01
Operating charges (17.63) (14.30) (13.72)
Return after operating charges*
547.28 273.30 218.29
Distributions (128.17) (115.73) (105.69)
Retained distributions 128.17 115.73 105.69
Closing NAV 2,762.84 2,215.56 1,942.26 *after direct transaction cost of 2.09 1.71 1.46 Performance Return after charges (%) 24.70 14.07 12.66
Other information Closing NAV (£’000) 56,333 37,080 34,797
Number of shares 2,038,934 1,673,597 1,791,567 Operating charges (%) 0.70 0.70 0.77 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 2,767.29 2,234.45 1,993.39 Lowest share price (UK p) 2,205.87 1,884.36 1,678.76
M&G Dividend Fund
Financial highlights
62 Annual report and audited financial statements • June 2026
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Sterling Class ‘R’ Income shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 110.55 103.37 98.05
Return before operating charges*
27.84 15.01 12.95
Operating charges (1.17) (1.02) (1.02)
Return after operating charges*
26.67 13.99 11.93
Distributions (7.16) (6.81) (6.61)
Closing NAV 130.06 110.55 103.37 *after direct transaction cost of 0.10 0.09 0.08
Performance Return after charges (%) 24.12 13.53 12.17
Other information Closing NAV (£’000) 17,179 15,608 14,923 Number of shares 13,208,627 14,119,055 14,435,611 Operating charges (%) 0.95 0.95 1.02 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 136.00 114.84 109.39
Lowest share price (UK p) 110.04 96.90 95.47
Sterling Class ‘R’ Accumulation shares The share class was launched on 3 August 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 214.47 188.47 167.72
Return before operating charges*
54.61 27.88 22.51
Operating charges (2.30) (1.88) (1.76)
Return after operating charges*
52.31 26.00 20.75
Distributions (11.78) (10.72) (9.84) Retained distributions 11.78 10.72 9.84
Closing NAV 266.78 214.47 188.47
*after direct transaction cost of 0.20 0.17 0.14 Performance Return after charges (%) 24.39 13.80 12.37
Other information Closing NAV (£’000) 22,151 20,334 19,578 Number of shares 8,303,080 9,481,039 10,387,819 Operating charges (%) 0.95 0.95 1.02 Direct transaction costs (%) 0.08 0.08 0.08
Prices Highest share price (UK p) 267.28 216.32 193.50 Lowest share price (UK p) 213.53 182.51 163.27
M&G Dividend Fund
Financial highlights
Annual report and audited financial statements • June 2026 63
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Statement of total return
for the year to 30 June 2026 2025
Note £’000 £’000 £’000 £’000 Income Net capital gains/(losses) 3 141,365 59,202
Revenue 5 48,675 49,620 Expenses 6 (4,378) (3,907) Interest payable and similar charges (16) (12)
Net revenue/(expense) before taxation 44,281 45,701 Taxation 7 (160) (30) Net revenue/(expense) after taxation 44,121 45,671
Total return before distributions 185,486 104,873 Distributions 8 (47,180) (48,446)
Change in net assets attributable to shareholders from investment activities
138,306 56,427
Statement of change in net assets attributable to shareholders
for the year to 30 June 2026 2025
£’000 £’000 £’000 £’000 Opening net assets attributable to shareholders 771,530 789,718 Amounts received on issue of shares 40,260 40,096 Amounts paid on cancellation of shares (91,040) (121,272) (50,780) (81,176)
Dilution adjustments 22 170 Change in net assets attributable to shareholders from investment activities (see above)
138,306 56,427
Retained distributions on Accumulation shares 6,857 6,238 Unclaimed distributions 200 153
Closing net assets attributable to shareholders 866,135 771,530
M&G Dividend Fund
Financial statements and notes
Financial statements
64 Annual report and audited financial statements • June 2026
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Balance sheet
as at 30 June Note 2026 2025 £’000 £’000
Assets Fixed assets Investments a 882,023 787,525 Current assets Debtors 9 4,183 4,552 Cash and bank balances 10 1,654 1,265 Cash equivalents 0 918 Total assets 887,860 794,260 Liabilities Creditors
Distribution payable (19,929) (19,430) Other creditors 11 (1,796) (3,300)
Total liabilities (21,725) (22,730)
Net assets attributable to shareholders 866,135 771,530
a Fair value of securities on loan is £19,339,000 (2025: £nil). Please refer to note 16 for details.
M&G Dividend Fund
Financial statements and notes
Financial statements
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Notes to the financial statements
1 Accounting policies The financial statements have been prepared in accordance with the ‘Summary of significant accounting policies’ set out on pages 9 to 12.
2 Distribution policy In order to conduct a controlled dividend flow to shareholders, interim distributions will be at the fund manager’s discretion, up to the maximum of the distributable income available for the period.
In determining the amount available for distribution to Income shares, the annual charge is offset against capital, increasing the amount available for distribution whilst restraining capital performance to an equivalent extent.
3 Net capital gains/(losses)
for the year to 30 June 2026 2025 £’000 £’000 Non-derivative securities 141,286 59,191 Currency gains/(losses) 79 11 Net capital gains/(losses) 141,365 59,202
M&G Dividend Fund
Financial statements and notes
66 Annual report and audited financial statements • June 2026
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4 Portfolio transactions and associated costs The following tables show portfolio transactions and their associated transaction costs. For more information about the nature of the costs please see the sections on ‘Operating charges’ and ‘Portfolio transaction costs’ within ‘Notes to the financial statements’ on pages 11 and 12. Total direct portfolio transaction costs are stated before dilution adjustments.
for the year to 30 June 2026 £’000
% of transaction
2025 £’000
% of transaction a) Purchases Equities Equities before transaction costs 134,449 125,002 Commissions 53 0.04 48 0.04 Taxes and other fees 562 0.42 532 0.42 Equities after transaction costs 135,064 125,582 Collective investment schemes Collective investment schemes before transaction costs
4,032 0
Commissions 1 0.03 0 0.00 Taxes and other fees 10 0.25 0 0.00 Collective investment schemes after transaction costs
4,043 0
Total purchases after transaction costs 139,107 125,582 b) Sales Equities Equities before transaction costs 177,489 194,537 Commissions (66) 0.04 (71) 0.04 Taxes and other fees (1) 0.00 (1) 0.00 Equities after transaction costs 177,422 194,465 Collective investment schemes Collective investment schemes before transaction costs
4,788 3,599
Commissions (2) 0.05 (2) 0.05 Collective investment schemes after transaction costs
4,786 3,597
Total sales after transaction costs 182,208 198,062
M&G Dividend Fund
Financial statements and notes
Annual report and audited financial statements • June 2026 67
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2026 £’000
% of average NAV
2025 £’000
% of average NAV c) Direct portfolio transaction costs Commissions paid Equities 119 0.01 119 0.02 Collective investment schemes 3 0.00 2 0.00 Total commissions paid 122 0.01 121 0.02 Taxes and other fees paid Equities 563 0.07 533 0.06 Collective investment schemes 10 0.00 0 0.00 Total taxes and other fees paid 573 0.07 533 0.06 Total direct portfolio transaction costs 695 0.08 654 0.08 %% d) Indirect portfolio transaction costs Average portfolio dealing spread as at the balance sheet date 0.17 0.20
5 Revenue
for the year to 30 June 2026 2025 £’000 £’000 Bank interest 47 Distributions from collective investment schemes: non-taxable 42 0 Distributions from collective investment schemes: taxable 73 0
Dividends from equity investments: non-taxable 46,341 47,813 Dividends from equity investments: taxable 122 7 Interest distributions 61 154 Property distribution: non-taxable 322 129 Property distribution: taxable 1,709 1,508 Rebate of ongoing charges from underlying funds 1 2 Securities lending income 00 Total revenue 48,675 49,620
6 Expenses
for the year to 30 June 2026 2025 £’000 £’000 Payable to the ACD or associate
Annual charge 4,378 3,907 Total expenses 4,378 3,907
Audit fees for the financial year ending 2026 were £12,000 (2025: £12,000) (including VAT), which are covered by the annual charge.
M&G Dividend Fund
Financial statements and notes
68 Annual report and audited financial statements • June 2026
Page 71
7 Taxation
for the year to 30 June 2026 2025 £’000 £’000 a) Analysis of charge in the year
Corporation tax 00 Withholding tax 160 30 Deferred tax (note 7c) 00
Total taxation 160 30 b) Factors affecting taxation charge for the year Net revenue/(expense) before taxation 44,281 45,701 Corporation tax at 20% 8,856 9,140 Effects of: Revenue: non-taxable (9,341) (9,588) Current year expenses not utilised 478 448 Withholding tax 160 30 Prior year adjustment to expenses not utilised 7 0 Total tax charge (note 7a) 160 30 c) Provision for deferred taxation
Provision at the start of the year 00 Deferred tax in profit and loss account (note 7a) 0 0
Provision at the end of the year 00 The fund has not recognised a deferred tax asset of £40,693,000 (2025: £40,215,000) arising as a result of having excess management expenses. We do not expect this asset to be utilised in the foreseeable future.
M&G Dividend Fund
Financial statements and notes
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8 Distributions For each distribution period, the distributions payable on Income shares (Inc) and distributions retained on Accumulation shares (Acc) are disclosed.
for the year to 30 June 2026 2025 Inc Acc Inc Acc Dividend distributions £’000 £’000 £’000 £’000 First interim 4,466 719 4,898 730 Second interim 4,362 687 4,750 690 Third interim 10,861 1,811 11,699 1,748 Final 19,929 3,640 19,430 3,070 Total net distributions 46,475 47,015 Income deducted on cancellation of shares 1,294 1,950
Income received on issue of shares (589) (519)
Distributions 47,180 48,446
Net revenue/(expense) per statement of total return 44,121 45,671 Expenses offset against capital 3,059 2,775
Distributions 47,180 48,446
9 Debtors
as at 30 June 2026 2025 £’000 £’000 Amounts receivable on issues of shares 122 74 Distributions receivable 12 Dividends receivable 3,599 3,459 Sales awaiting settlement 367 715 Withholding tax recoverable 94 302 Total debtors 4,183 4,552
10 Cash and bank balances
as at 30 June 2026 2025 £’000 £’000 Cash held as bank balances 1,654 1,265 Total cash and bank balances 1,654 1,265
M&G Dividend Fund
Financial statements and notes
70 Annual report and audited financial statements • June 2026
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11 Other creditors
as at 30 June 2026 2025 £’000 £’000 Amounts payable on cancellation of shares 644 2,976 Annual charge payable 279 234 Purchases awaiting settlement 873 90
Total other creditors 1,796 3,300
12 Contingent assets, liabilities and outstanding commitments There were no contingent assets, liabilities or outstanding commitments at the balance sheet date (2025: same).
13 Shares in issue The following table shows each class of share in issue during the year. Each share class has the same rights on winding up however they may have different charging structures as set out in note 14.
Share class Opening Movements Closing 01.07.25 Issued Cancelled Converted 30.06.26
Sterling Class ‘A’ Income 338,167,484 7,864,890 (28,984,513) 0 317,047,861
Class ‘A’ Accumulation 6,953,856 366,366 (625,279) 0 6,694,943 Class ‘C’ Income 492,180,112 7,478,286 (56,655,719) 0 443,002,679 Class ‘I’ Income 7,570,381 803,866 (821,483) 0 7,552,764 Class ‘I’ Accumulation 1,673,597 528,623 (163,286) 0 2,038,934 Class ‘R’ Income 14,119,055 689,139 (1,599,567) 0 13,208,627 Class ‘R’ Accumulation 9,481,039 515,083 (1,693,042) 0 8,303,080
It is not possible to separately identify all share class conversions. As a result, the share class movements (issued/cancelled) as disclosed in the t able above may also include share class conversions.
14 Charging structure The table below sets out the charging structure for each class of share. The charging structure is the same for both Income and Accumulation shares of each class. The amounts shown are the maximum annual charge. M&G will apply a discount of 0.02% for every £1 billion of a fund’s net asset value. This is assessed quarterly and implemented on a forward basis no later than 13 business days after quarter end.
Share class Annual charge % Sterling Class ‘A’ 1.10 Class ‘C’ 0.00 Class ‘I’ 0.70 Class ‘R’ 0.95
M&G Dividend Fund
Financial statements and notes
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15 Related parties M&G Securities Limited, as Authorised Corporate Director (ACD), is a related party and acts as principal on all the transactions of shares in the fund except with in specie transactions, where M&G Securities Limited acts as an agent. The aggregate monies received through issues, and paid on cancellations, are disclosed in the ‘Statement of change in net assets attributable to shareholders’ and note 8. Amounts due to/from M&G Securities Limited in respect of share transactions at the year end are disclosed in notes 9 and 11 where applicable.
Amounts paid to M&G Securities Limited in respect of the annual charge are disclosed in note 6. Amounts due at the year end in respect of the annual charge are disclosed in note 11.
Amounts paid to M&G Securities Limited in respect of rebate arrangements for the annual charge are disclosed in notes 3 and 5. Amounts due at the year end from the ACD, and/or associate, in respect of these rebates are disclosed in note 9.
Amounts paid to M&G Investment Management Limited in respect of securities lending activities are disclosed in note 16.
At the balance sheet date, entities within M&G plc, of which M&G Securities Limited is a wholly owned subsidiary, held in aggregate 49.81% (2025: 51.94%) of the net asset value of the fund.
16 Securities lending transactions The fund carried out securities lending transactions for the purpose of efficient portfolio management and in order to generate income. Revenue earned from these transactions is shown in notes 5 and is net of agents fees which are payable to M&G Investment Management Limited.
Any applicable bank fees are deducted from the fund’s net return and vary by jurisdiction. Please see the prospectus for further details. Additional information is also disclosed within ‘Other regulatory disclosures’.
30.06.26 £’000
30.06.25 £’000 Fair value of securities on loan at the balance sheet date 19,339 0
2026 £’000
2025 £’000 Fund gross return 00 Agents fees 00 Fund net return 00
The collateral held by asset type at the year end is stated below:
Asset class 30.06.26 £’000
30.06.25 £’000 Equities 21,491 0 Total 21,491 0
The counterparties of the collateral held are Bank of Nova Scotia, HSBC and Macquarie Bank.
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72 Annual report and audited financial statements • June 2026
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17 Fair value analysis Financial instruments have been measured at their fair value and have been classified below using a hierarchy that reflects the significance of the inputs used in measuring their fair value:
Level 1: Unadjusted quoted price in an active market for an identical instrument This includes instruments such as publicly traded equities, highly liquid bonds (eg Government bonds) and exchange traded derivatives (eg futures) for which quoted prices are readily and regularly available.
Level 2: Valuation technique using observable market data This includes instruments such as over-the-counter (OTC) derivatives, debt securities, convertible bonds, mortgage-backed securities, asset-backed securities and open-ended funds which have been valued using models with observable market data inputs.
Level 3: Valuation technique using unobservable inputs This refers to instruments which have been valued using models with unobservable data inputs. This includes single broker-priced instruments, suspended/unquoted securities, private equity, unlisted closed-ended funds and open-ended funds with restrictions on redemption rights.
as at 30 June Assets 2026
Liabilities 2026
Assets 2025
Liabilities 2025 Basis of valuation £’000 £’000 £’000 £’000
Level 1 882,023 0 786,894 0 Level 2 0 0 0 0 Level 3 0 0 631 0
882,023 0 787,525 0
2025: Level 3 assets comprised of Home REIT which was held at a discount to estimated NAV.
18 Risk management policies The general risk management policies for the fund are set out in note 3 to the financial statements on pages 12 to 15.
19 Market risk sensitivity A five per cent increase in the value of the fund’s investment portfolio would have the effect of increasing the return and net assets by £44,101,000 (2025: £39,376,000). A five per cent decrease would have an equal and opposite effect.
20 Currency risk sensitivity and exposure Currency risk is not considered significant for the fund and is therefore not disclosed.
21 Interest rate risk sensitivity and exposure As the majority of the fund’s financial assets are non-interest bearing, the risk is not considered significant and is therefore not disclosed.
22 Credit risk Credit risk with regard to derivative balances is not considered significant and is therefore not disclosed.
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23 Dividend distribution tables This fund pays quarterly ordinary distributions and the following table sets out the distribution periods.
Quarterly distribution periods
Start End Xd Payment First interim 01.07.25 30.09.25 01.10.25 30.11.25 Second interim 01.10.25 31.12.25 02.01.26 28.02.26 Third interim 01.01.26 31.03.26 01.04.26 31.05.26 Final 01.04.26 30.06.26 01.07.26 31.08.26
The following tables set out for each distribution the rates per share for both Group 1 and Group 2 shares.
Group 1 shares are those purchased prior to a distribution period and therefore their income rate is the same as the distribution rate.
Group 2 shares are those purchased during a distribution period and therefore their distribution rate is made up of income and equalisation. Equalisation is the average amount of income included in the purchase price of all Group 2 shares and is refunded to the holders of these shares as a return of capital. Being capital it is not liable to Income Tax. Instead, it must be deducted from the cost of shares for Capital Gains Tax purposes. The tables below show the split of the Group 2 rates into the income and equalisation components.
Sterling Class ‘A’ Income shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.0000 0.3850 0.3850 0.3850 Second interim 0.0000 0.3850 0.3850 0.3850 Third interim 0.0000 0.9800 0.9800 0.9750 Final 0.3486 1.4748 1.8234 1.6562
Sterling Class ‘A’ Accumulation shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p
First interim 0.0000 5.4000 5.4000 5.1200 Second interim 0.0000 5.0900 5.0900 5.0000 Third interim 0.0000 13.4000 13.4000 12.8500 Final 7.6523 18.7380 26.3903 22.9933
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74 Annual report and audited financial statements • June 2026
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Sterling Class ‘C’ Income shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.0000 0.5100 0.5100 0.5050 Second interim 0.0000 0.5100 0.5100 0.5000 Third interim 0.0000 1.3000 1.3000 1.2850 Final 0.3358 2.1032 2.4390 2.1887
Sterling Class ‘I’ Income shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.0000 7.9700 7.9700 7.9400 Second interim 0.0000 7.9700 7.9700 8.0000 Third interim 1.5035 18.7965 20.3000 20.1000 Final 11.8911 25.9666 37.8577 34.1959
Sterling Class ‘I’ Accumulation shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 1.0121 12.6648 13.6769 12.8700 Second interim 0.0000 13.2500 13.2500 12.7000 Third interim 1.6618 32.8382 34.5000 32.6200 Final 20.1344 46.6043 66.7387 57.5406
Sterling Class ‘R’ Income shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.1022 0.6678 0.7700 0.7700 Second interim 0.0000 0.7700 0.7700 0.7700 Third interim 0.0000 1.9600 1.9600 1.9500 Final 1.0961 2.5659 3.6620 3.3161
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Annual report and audited financial statements • June 2026 75
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Sterling Class ‘R’ Accumulation shares
Ordinary distributions Group 2 Group 1 & 2 for the year Income Equalisation Distribution to 30 June 2026 2026 2026 2025 UK p UK p UK p UK p First interim 0.0000 1.2600 1.2600 1.2000 Second interim 0.0000 1.2000 1.2000 1.1600 Third interim 0.0420 3.1180 3.1600 3.0000 Final 1.4960 4.6669 6.1629 5.3601
24 Events after the balance sheet date There were no events after the balance sheet date to disclose.
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76 Annual report and audited financial statements • June 2026
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For the purposes of these financial statements, the Prospectus dated 9 June 2026 has been used.
Investment objective
The fund aims to provide a higher total return (the combination of capital growth and income), net of the ongoing charge figure, than that of a composite index* over any five-year period.
* The composite index is made up of one third JPM EMBI Global Diversified Index, one third JPM CEMBI Broad Diversified Index and one third JPM GBI-EM Global Diversified Index.
Investment policy
At least 80% of the fund is invested, directly or indirectly through derivatives, in emerging market debt securities. These securities can be issued or guaranteed by emerging market governments and their agencies, public authorities, quasi-sovereigns, supranational bodies and companies that are incorporated, domiciled, listed or do most of their business in emerging markets. These securities can be denominated in any currency, including emerging market currencies.
Other investments may include:
• asset-backed securities; and
• other transferable securities, cash, and near cash, directly or via collective investment schemes (including funds managed by M&G).
There are no credit quality restrictions applicable to the fund’s investments.
Derivatives may be used for investment purposes, efficient portfolio management and hedging.
Investment approach
The fund is globally diversified across a range of emerging market debt securities and issuers from a variety of sectors and geographies. The fund’s investment approach is flexible and begins with an assessment of macroeconomic factors such as global risk appetite and the catalysts of global economic growth.
On a regional and country-specific level, factors such as monetary and fiscal policies, capital flows, and political and regulatory environments are assessed. The result of this analysis will help inform the country, currency allocations and duration of the portfolio.
Individual credit selection is carried out with the assistance of an in-house team of credit analysts to complement the fund manager’s views.
Benchmark
A composite index comprising:
• 1/3 JPM EMBI Global Diversified Index
• 1/3 JPM CEMBI Broad Diversified Index
• 1/3 JPM GBI-EM Global Diversified Index
The benchmark is a target which the fund seeks to outperform. The composite index has been chosen as the fund’s benchmark as it best reflects the scope of the fund’s investment policy. The benchmark does not constrain the fund’s portfolio construction.
The fund is actively managed.
The fund manager has complete freedom in choosing which assets to buy, hold and sell in the fund. The fund’s holdings may deviate significantly from the benchmark’s constituents.
For each share class the benchmark will be denominated or hedged into the relevant share class currency. The benchmark for each share class will be shown in its respective KIID.
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Risk profile
For details of the risks associated with this fund, please refer to the Prospectus. For details of the risk management policies, please refer to pages 12 to 15.
The following table shows the risk number associated with the fund and is based on Sterling Class ‘A’ shares.
Low risk High risk
Typically lower rewards Typically higher rewards
123 4 567
The above number:
• is based on the rate at which the value of the fund has moved up and down in the past and is based on historical data so may not be a reliable indicator of the future risk profile of the fund.
• is not guaranteed and may change over time and the lowest risk number does not mean risk free.
• has not changed during this period.
Investment review
For the year ended 30 June 2026
Performance against objective Between 1 July 2025 and 30 June 2026, the fund delivered a positive total return (the combination of income and growth of capital) across all its share classes. The fund outperformed its benchmark, which returned 12.4% over the same period, in GBP terms.
The fund’s benchmark is a composite index consisting of 1/3 JPM Emerging Markets Bond (EMBI) Global Diversified Index, 1/3 JPM Corporate EMBI (CEMBI) Broad Diversified Index, and 1/3 JPM GBI-EM Global Diversified Index.
Over five years, the fund achieved its objective of providing a combination of capital growth and income, net of the ongoing charge figure, higher than the benchmark composite index over any five-year period, in its sterling share classes. The return of the
benchmark composite index was 3.3% pa over this period, in GBP terms.
For the performance of each share class, please refer to the ‘Long-term performance by share class’ table in the ‘Financial highlights’ section of this report.
Performance review In the first half of the period under review, US tariffs and the US Federal Reserve’s (Fed) monetary policy decisions remained the main focus for emerging markets (EM) debt at the macro level. While the tariff announcement initially drove a sharp widening in spreads, the eventual implementation of tariffs had a more limited impact on emerging markets, supported by their stable economic backdrop. (Credit spreads measure the difference between the yield of a corporate bond and a government bond of the same maturity). The Fed’s widely anticipated September interest rate cut, followed by two further reductions in the fourth quarter, brought US interest rates to a three-year low of 3.50%-3.75%, enhancing the appeal of EM debt, which generally offers higher yields as investors demand higher returns for the additional risk of investing in developing countries. Later, the then-Fed Chair Jerome Powell adopted a cautious tone, citing the challenge of addressing rising inflation and unemployment simultaneously. The US dollar closed December weaker, extending its 2025 softness.
EM debt delivered positive returns in early 2026, supported by resilient global activity and a softening trend for inflation, despite geopolitical headlines which included the Venezuelan president’s arrest by the US, protests against the regime in Iran and sudden US territorial claims for Greenland. However, strikes on Iran by the US and Israel at the end of February reduced investors’ appetite for risk. This was followed by the near closure of the Strait of Hormuz raising oil prices, leading to stagflation concerns and prompting developed market central banks to hold, rather than cut, interest rates, driving prices in bond markets lower.
April witnessed a rebound in investor optimism, catalysed by a ceasefire between Israel and Lebanon, narrowing credit spreads (which indicate bond
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investors requiring less additional compensation to hold riskier bonds) and softening energy prices. EM debt remained resilient in May amid weaker economic growth and cautious central banks, before gaining further in June as easing Middle East tensions, supportive credit markets and declining energy prices reinforced positive sentiment.
Amid the volatility, EM debt performance was strong overall and posted positive returns in the period under review. Hard currency government debt was the strongest performer (+11.8%), ahead of local currency government debt (+7.8%) and hard currency corporate debt (+6.8%).
Country allocation was the largest contributor to performance relative to the benchmark, particularly our above-benchmark exposure to Venezuela, Cote d’Ivoire, Turkey, Romania and Ghana, which were among the top contributors. Our security selection in Uzbekistan and Kazakhstan also contributed to positive performance. In contrast, our underweight to Panama was a large relative detractor. Switzerland, Chile and Indonesia also contributed negatively due to both our security selection and country allocation.
Investment activities In sovereign bonds, during the third quarter of 2025, we participated in euro-denominated new issues from Romania, Bosnia, Turkey, Bulgaria and USD bonds of Chile. We extended duration in euro-denominated Romanian sovereign bonds, added exposure to Poland and bought some Riyadh Sukuk (Islamic bonds). (Duration is a measure of a bond’s sensitivity to changes in interest rates – the longer a bond’s duration the more sensitive it is to interest rate movements). We reduced our exposure to Colombia sovereign bonds to fund the purchase of a bond from Colombia’s quasi-sovereign petroleum company Ecopetrol. We also bought bonds issued by supra-nationals Inter-American Development Bank (IABD) and the International Bank for Reconstruction & Development (IBRD, the World Bank’s biggest development bank).
During the fourth quarter, we topped up bonds issued by Suriname, Kenya, Romania, Saudi Arabia and
Bulgaria, and switched from Mozambique to Gabon on valuation grounds. We bought new issue from South Africa, reduced Angola, Benin and Ghana and switched out of several USD-denominated bonds into EUR-denominated bonds for Colombia. At the start of 2026, we bought new issues from Hungary, Turkey, Mexico, North Macedonia and the Province of Cordoba. We participated in new issues from Brazil, Dominican Republic, Ivory Coast, Paraguay and Romania, and reduced Venezuela in February. In March, we bought new issues from Angola, Bahrain and also bought a euro-denominated bond issued by Republika Srpska, an entity of Bosnia and Herzegovina. During April, we added some risk in the Middle East mainly through switches and by reducing our below-benchmark position in Bahrain (bringing our exposure to Bahrain closer to the benchmark). We also bought euro-denominated issues from Brazil, San Marino and Serbia, added Benin and reduced Ivory Coast and Gabon. In May, we bought new issues from Angola, Bolivia and Morocco. We further added Benin and exited Zambia in June.
In local currency bonds, we managed flows to top up existing positions in Egypt, Brazil, Mexico, Turkey and Ukraine, reduced our below-benchmark exposure to Thailand while increasing our below-benchmark position in the Czech Republic.
In corporate debt, during the first half of the review period, we participated in new issues from Jamaican airport Montego Bay, mining group Antofagasta, banks including Peru’s biggest bank Banco de Credito and mBank. We added Empresa de Transmision, energy transmission services provider in Panama and reduced exposure to Chinese food delivery platform Meituan on deteriorating credit fundamentals.
We also reduced our positions in Malaysian energy infrastructure company Yinson Boronia and Kazakhstan’s ForteBank. In the second half of the review period, we bought new issues from Aldar Properties, energy businesses Azule Energy and Kosmos Energy, subcontract manufacturer HTA Group and banking names, such as QNB Bank, Standard Chartered bank, Banco Mercantil, Development Bank of
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Mongolia and Commercial Bank PSQC, solar power operator Cox Asset Mexico, energy business Green Palm Bidco, and healthcare business Burjeel. We also added Mauritius Commercial Bank, food processing business Minerva and Dangote Fertiliser.
Outlook Looking ahead, we continue to see a compelling case for EM debt. In our view, many emerging economies compare favourably with developed markets in terms of economic growth, inflation and fiscal metrics, while real yields (the return after accounting for inflation) remain attractive across a broad range of countries. Although geopolitical risks and policy uncertainty remain important considerations, EMs continue to benefit from stronger starting fundamentals than in previous periods of global volatility.
While spreads have narrowed significantly since the period of heightened geopolitical concern, overall yield levels remain attractive, particularly when compared with developed market alternatives. We believe investors are increasingly evaluating EMs on their individual fundamentals rather than solely through the lens of global risk sentiment, creating opportunities for active managers to add value through country allocation and security selection.
Within the fund, we continue to see opportunities across both hard currency and local currency markets. Local debt remains attractive in countries where real yields are high and disinflationary trends remain intact, while selective sovereign and corporate debt issuers continue to offer attractive value. The fund remains positioned to benefit from these opportunities through a diversified allocation across government bonds, corporate bonds and local markets, while maintaining a modest above-benchmark position to duration and credit spread risk where valuations remain supportive.
Against a backdrop of ongoing geopolitical uncertainty and fiscal challenges in many developed economies, we believe the breadth and diversification of the EM debt universe remain important advantages for long-term investors.
Charles de Quinsonas, Nick Smallwood and Carlos Carranza Co-fund managers
Employees of M&G FA Limited which is an associate of M&G Securities Limited. Please note that effective from 1 September 2025, Nick Smallwood replaced Claudia Calich as co-fund manager. Please also note that effective from 1 January 2026, Carlos Carranza was appointed as co-fund manager. Please note that the views expressed in this Report should not be taken as a recommendation or advice on how the fund or any holding mentioned in the Report is likely to perform. If you wish to obtain financial advice as to whether an investment is suitable for your needs, you should consult a Financial Adviser.
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80 Annual report and audited financial statements • June 2026
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Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 %
Equities 5 0.00 0.00 287,144 Yuzhou Group Holdings Co. Ltd. a 5 0.00 Fixed income 1,576,369 97.97 96.42 Argentine peso denominated bonds 270 0.02 0.02 Government bonds 270 0.02 0.02 ARS409,441,000 Argentina Treasury Bonds BONTE 15.5% 17/10/2026 270 0.02
Brazilian real denominated bonds 48,641 3.02 2.92 Government bonds 48,641 3.02 2.92 BRL323,000,000 Brazil Notas do Tesouro Nacional 10% 01/01/2033 48,641 3.02
CFA franc BCEAO denominated bonds 4,528 0.28 0.33 Government bonds 4,528 0.28 0.33
XOF2,599,500,000 Ivory Coast Government International Bonds 6.875% 01/04/2028
4,528 0.28
Chilean peso denominated bonds 4,484 0.28 0.00 Government bonds 4,484 0.28 0.00
CLP4,000,000,000 Bonos de la Tesoreria de la Republica en pesos 6% 01/04/2033
4,484 0.28
Colombian peso denominated bonds 30,411 1.89 1.63 Corporate bonds 7,204 0.45 0.44 COP26,919,000,000 Empresas Publicas de Medellin ESP 8.375% 08/11/2027
7,204 0.45
Government bonds 23,207 1.44 1.19 COP19,571,000,000 Bogota Distrito Capital 9.75% 26/07/2028 5,469 0.34 COP71,200,000,000 Colombia TES 7.25% 26/10/2050 13,166 0.82 COP15,000,000,000 Colombia TES 13.25% 09/02/2033 4,572 0.28
Czech koruna denominated bonds 0 0.00 0.84 Government bonds 0 0.00 0.84
Dominican peso denominated bonds 15,707 0.98 1.10 Government bonds 15,707 0.98 1.10 DOP174,200,000 Dominican Republic International Bonds 11.25% 15/09/2035
3,217 0.20
DOP623,050,000 Dominican Republic International Bonds 13.625% 03/02/2033
12,490 0.78
M&G Emerging Markets Bond Fund
Portfolio statement
Investments
Annual report and audited financial statements • June 2026 81
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Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued)
Egyptian pound denominated bonds 12,997 0.81 0.37 Government bonds 12,997 0.81 0.37 EGP352,950,000 Egypt Treasury Bills 0% 10/11/2026 6,611 0.41 EGP370,000,000 Egypt Treasury Bills 0% 23/03/2027 6,386 0.40
Euro denominated bonds 125,865 7.82 6.10 Corporate bonds 7,123 0.44 1.26 EUR2,355,000 Eastern European Electric Co. BV 6.5% 15/05/2030 2,784 0.17 EUR1,000,000 mBank SA Var 4.335% 26/05/2033 1,162 0.07 EUR2,500,000 mBank SA Var 4.7784% 25/09/2035 2,913 0.18 EUR1,118,950 Oriflame Investment Holding PLC 8% 19/12/2032 264 0.02
Government bonds 118,742 7.38 4.84 EUR4,816,000 Albania Government International Bonds 4.75% 14/02/2035
5,536 0.34
EUR3,657,000 Banque Ouest Africaine de Developpement 6.25% 14/10/2040
3,991 0.25
EUR3,000,000 Benin Government International Bonds 4.95% 22/01/2035
3,219 0.20
EUR2,200,000 Benin Government International Bonds 6.875% 19/01/2052
2,345 0.15
EUR4,280,000 Brazil Government International Bonds 5.5% 23/04/2036
4,931 0.31
EUR4,167,000 Bulgaria Government International Bonds 4.125% 07/05/2038
4,756 0.29
EUR4,654,000 Bulgaria Government International Bonds 4.125% 18/07/2045
5,086 0.32
EUR3,820,000 Colombia Government International Bonds 5% 19/09/2032
4,317 0.27
EUR3,640,000 Colombia Government International Bonds 6.5% 26/11/2038
4,358 0.27
EUR2,933,000 Federation of Bosnia & Herzegovina Eurobond 5% 04/06/2031
3,316 0.21
EUR2,764,000 Hungary Government International Bonds 4.875% 25/03/2038
3,310 0.21
EUR2,999,000 Ivory Coast Government International Bonds 4.875% 30/01/2032
3,370 0.21
EUR6,539,000 Ivory Coast Government International Bonds 6.625% 22/03/2048
7,190 0.45
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
82 Annual report and audited financial statements • June 2026
Page 85
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Euro denominated bonds (continued) Government bonds (continued)
EUR3,598,000 Morocco Government International Bonds 4.75% 26/05/2034
4,179 0.26
EUR2,154,000 North Macedonia Government International Bonds 3.875% 21/01/2030
2,435 0.15
EUR1,615,000 North Macedonia Government International Bonds 4.75% 21/01/2034
1,827 0.11
EUR2,650,000 Republic of Srpska International Government Bonds 6.25% 02/04/2031
3,055 0.19
EUR7,500,000 Romania Government International Bonds 2% 14/04/2033
6,993 0.43
EUR10,089,000 Romania Government International Bonds 2.875% 13/04/2042
7,758 0.48
EUR2,900,000 Romania Government International Bonds 3.375% 08/02/2038
2,622 0.16
EUR2,565,000 Romania Government International Bonds 6% 24/09/2044
2,852 0.18
EUR3,364,000 Romania Government International Bonds 6.5% 07/10/2045
3,869 0.24
EUR6,186,000 Romania Government International Bonds 6.75% 11/07/2039
7,476 0.46
EUR3,741,000 San Marino International Bonds 3.625% 30/04/2031 4,323 0.27 EUR2,000,000 Serbia International Bonds 1.65% 03/03/2033 1,925 0.12 EUR10,868,000 Serbia International Bonds 2.05% 23/09/2036 9,802 0.61 EUR3,426,000 Serbia International Bonds 4.875% 06/05/2038 3,901 0.24
Georgian lari denominated bonds 3,372 0.21 0.24
Government bonds 3,372 0.21 0.24 GEL8,833,000 Georgia Treasury Bonds 9.75% 27/01/2027 3,372 0.21
Hungarian forint denominated bonds 27,463 1.71 1.68 Government bonds 27,463 1.71 1.68 HUF3,220,000,000 Hungary Government Bonds 4.75% 24/11/2032 10,142 0.63
HUF5,225,000,000 Hungary Government Bonds 6.75% 22/10/2028 17,321 1.08
Indian rupee denominated bonds 50,673 3.15 3.18 Corporate bonds 50,673 3.15 3.18 INR224,500,000 Asian Infrastructure Investment Bank 6.9% 23/10/2034
2,257 0.14
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 83
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Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Indian rupee denominated bonds (continued) Corporate bonds (continued)
INR450,000,000 Asian Infrastructure Investment Bank 7% 23/01/2032 4,622 0.29 INR150,000,000 Asian Infrastructure Investment Bank 7.2% 02/07/2031
1,564 0.10
INR1,123,000,000 European Bank for Reconstruction & Development 6.5% 03/10/2036
11,129 0.69
INR500,000,000 European Bank for Reconstruction & Development 6.75% 13/01/2032
5,126 0.32
INR420,000,000 European Investment Bank 7.4% 23/10/2033 4,434 0.27 INR755,000,000 Inter-American Development Bank 7% 17/04/2033 7,807 0.48 INR480,000,000 Inter-American Development Bank 7% 08/08/2033 4,961 0.31
INR460,000,000 International Bank for Reconstruction & Development 6.71% 21/01/2035
4,625 0.29
INR400,000,000 International Bank for Reconstruction & Development 6.75% 13/07/2029
4,148 0.26
Indonesian rupiah denominated bonds 42,137 2.62 3.23 Government bonds 42,137 2.62 3.23 IDR192,000,000,000 Indonesia Treasury Bonds 7.5% 15/06/2035 10,927 0.68 IDR209,881,000,000 Indonesia Treasury Bonds 8.25% 15/05/2036 12,574 0.78
IDR161,600,000,000 Indonesia Treasury Bonds 8.375% 15/03/2034 9,646 0.60 IDR147,667,000,000 Indonesia Treasury Bonds 8.375% 15/04/2039 8,990 0.56
Jamaican dollar denominated bonds 9,334 0.58 0.65 Government bonds 9,334 0.58 0.65 JMD1,396,500,000 Jamaica Government International Bonds 9.625% 03/11/2030
9,334 0.58
Kazakhstan tenge denominated bonds 9,999 0.62 0.73 Corporate bonds 0 0.00 0.20
Government bonds 9,999 0.62 0.53 KZT600,000,000 European Bank for Reconstruction & Development 15.25% 14/08/2026
1,248 0.08
KZT1,700,000,000 Kazakhstan Government Bonds - MEUKAM 5% 18/04/2028
2,998 0.19
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
84 Annual report and audited financial statements • June 2026
Page 87
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Kazakhstan tenge denominated bonds (continued) Government bonds (continued)
KZT1,000,000,000 Kazakhstan Government Bonds - MEUKAM 9% 03/07/2027
1,967 0.12
KZT1,752,130,000 Kazakhstan Government Bonds - MEUKAM 15.1% 12/03/2034
3,786 0.23
Malaysian ringgit denominated bonds 47,739 2.97 3.30 Government bonds 47,739 2.97 3.30 MYR67,000,000 Malaysia Government Bonds 3.582% 15/07/2032 16,486 1.03 MYR62,678,000 Malaysia Government Bonds 3.844% 15/04/2033 15,650 0.97 MYR62,500,000 Malaysia Government Bonds 3.885% 15/08/2029 15,603 0.97
Mexican peso denominated bonds 56,815 3.53 3.35 Government bonds 56,815 3.53 3.35 MXN1,046,290,000 Mexico Bonos 8.5% 18/11/2038 56,815 3.53
Nigerian naira denominated bonds 7,518 0.47 0.54 Government bonds 7,518 0.47 0.54 NGN8,550,000,000 Nigeria Government Bonds 19.89% 15/05/2033 6,458 0.40 NGN1,560,000,000 Nigeria OMO Bills 0% 20/10/2026 1,060 0.07
Paraguay guarani denominated bonds 21,360 1.33 1.06 Government bonds 21,360 1.33 1.06 PYG68,758,000,000 Paraguay Government International Bonds 7.9% 09/02/2031
10,837 0.68
PYG53,000,000,000 Paraguay Government International Bonds 8.5% 04/03/2035
8,409 0.52
PYG13,474,000,000 Paraguay Government International Bonds 8.5% 04/04/2038
2,114 0.13
Peruvian nouveau sol denominated bonds 11,770 0.73 0.76 Government bonds 11,770 0.73 0.76 PEN37,500,000 Peru Government Bonds 7.6% 12/08/2039 11,770 0.73
Philippines peso denominated bonds 13,881 0.86 1.06 Government bonds 13,881 0.86 1.06 PHP928,000,000 Philippines Government International Bonds 6.25% 14/01/2036
13,881 0.86
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 85
Page 88
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued)
Polish zloty denominated bonds 46,062 2.86 2.79 Government bonds 46,062 2.86 2.79 PLN107,000,000 Republic of Poland Government Bonds 1.75% 25/04/2032
24,115 1.50
PLN84,000,000 Republic of Poland Government Bonds 5% 25/10/2035
21,947 1.36
Romanian leu denominated bonds 0 0.00 1.44 Government bonds 0 0.00 1.44
South African rand denominated bonds 50,393 3.13 2.61 Government bonds 50,393 3.13 2.61 ZAR838,870,968 Republic of South Africa Government Bonds 8.75% 31/01/2044
50,393 3.13
Thailand baht denominated bonds 6,543 0.41 0.39 Government bonds 6,543 0.41 0.39 THB187,687,000 Thailand Government Bonds Inflation-Linked 1.25% 12/03/2028
6,543 0.41
Turkish lira denominated bonds 12,869 0.80 0.44 Government bonds 12,869 0.80 0.44 TRY380,000,000 Turkiye Government Bonds 31.08% 08/11/2028 7,521 0.47
TRY250,000,000 Turkiye Government Bonds 36% 12/08/2026 5,348 0.33
Ukraine hryvna denominated bonds 8,414 0.52 0.50 Government bonds 8,414 0.52 0.50 UAH203,700,000 Ukraine Government Bonds 16.35% 16/09/2026 4,552 0.28 UAH172,000,000 Ukraine Government Bonds 17.1% 10/03/2027 3,862 0.24
Uruguayan peso denominated bonds 19,771 1.23 1.56 Government bonds 19,771 1.23 1.56 UYU503,902,481 Uruguay Government International Bonds Inflation-Linked 3.875% 02/07/2040
19,771 1.23
US dollar denominated bonds 871,227 54.14 52.56 Corporate bonds 420,494 26.13 24.40 USD2,693,000 Aegea Finance SARL 9% 20/01/2031 2,552 0.16 USD3,239,919 AES Panama Generation Holdings SRL 4.375% 31/05/2030
3,060 0.19
USD2,166,000 Africa Finance Corp. 5.375% 23/06/2031 2,161 0.13
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
86 Annual report and audited financial statements • June 2026
Page 89
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD3,300,000 Akbank TAS Var 8.25% 08/12/2036 3,326 0.21 USD4,816,000 Aldar Properties PJSC Var 5.875% 14/04/2056 4,555 0.28 USD2,766,000 ALROSA Finance SA 3.1% 25/06/2027 b 0 0.00 USD2,117,000 Antofagasta PLC 5.625% 09/09/2035 2,140 0.13 USD1,851,000 Antofagasta PLC 6.25% 02/05/2034 1,956 0.12
USD4,300,000 Aydem Yenilenebilir Enerji AS 9.875% 30/09/2030 4,267 0.27 USD2,160,000 Azule Energy Finance PLC 8.25% 22/01/2031 2,157 0.13 USD2,000,000 Azule Energy Finance PLC 8.625% 22/01/2033 2,002 0.12 USD3,430,000 Banco Davivienda SA Var 8.125% 02/07/2035 3,534 0.22 USD2,933,000 Banco de Credito del Peru SA Var 3.25% 30/09/2031 2,913 0.18 USD2,643,000 Banco de Credito del Peru SA Var 5.65% 15/01/2037 2,651 0.16
USD1,500,000 Banco General SA Var 5.25% Perpetual 1,432 0.09 USD2,600,000 Banco Mercantil del Norte SA Var 8.375% Perpetual 2,648 0.16 USD1,838,000 Banco Mercantil del Norte SA Var 8.45% Perpetual 1,841 0.11 USD1,348,000 Banco Mercantil del Norte SA Var 8.75% Perpetual 1,391 0.09 USD2,888,000 Banco Nacional de Mexico SA Var 6.697% 07/08/2036 2,843 0.18 USD3,745,000 Bangkok Bank PCL 5.082% 26/11/2035 3,698 0.23 USD2,500,000 Bangkok Bank PCL Var 3.733% 25/09/2034 2,379 0.15
USD3,125,000 Bangkok Bank PCL Var 6.056% 25/03/2040 3,184 0.20 USD3,200,000 Bank of East Asia Ltd. Var 5.375% 13/05/2032 3,206 0.20 USD1,500,000 Bank of East Asia Ltd. Var 6.75% 27/06/2034 1,554 0.10 USD3,500,000 Banque Saudi Fransi Var 6.375% Perpetual 3,489 0.22
USD2,000,000 BBVA Mexico SA Institucion De Banca Multiple Grupo Financiero BBVA Mexico Var 8.125% 08/01/2039
2,126 0.13
USD3,000,000 BBVA Mexico SA Institucion De Banca Multiple Grupo Financiero BBVA Mexico Var 8.45% 29/06/2038
3,237 0.20
USD5,281,716 Bioceanico Sovereign Certificate Ltd. 0% 05/06/2034 4,321 0.27 USD4,000,000 Braskem Netherlands Finance BV 8% 15/10/2034 2,334 0.15 USD2,060,000 Burjeel Sukuk Ltd. 7% 01/07/2031 2,064 0.13
USD2,208,000 C&W Senior Finance Ltd. 9% 15/01/2033 2,233 0.14 USD3,413,000 Cas Capital No. 2 Ltd. Var 6.25% Perpetual 3,424 0.21
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 87
Page 90
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD4,040,000 Commercial Bank PSQC Var 6.25% Perpetual 3,986 0.25 USD3,045,000 Continuum Energy Aura Pte. Ltd. 9.5% 24/02/2027 3,054 0.19 USD2,451,000 COX Asset Mexico SA de CV 7.75% 08/05/2036 2,501 0.16 USD3,933,000 Dangote Fertiliser Ltd. 7.75% 05/05/2031 3,965 0.25 USD5,200,000 Dar Al-Arkan Sukuk Co. Ltd. 7.25% 26/05/2031 5,139 0.32
USD1,772,000 Dar Al-Arkan Sukuk Co. Ltd. 8% 25/02/2029 1,794 0.11 USD3,840,000 DP World Crescent Ltd. 5.5% 13/09/2033 3,850 0.24 USD2,370,000 DP World Crescent Ltd. 5.5% 08/05/2035 2,374 0.15 USD2,739,000 Ecobank Transnational, Inc. 10.125% 15/10/2029 2,959 0.18 USD4,200,000 Ecopetrol SA 5.875% 02/11/2051 3,361 0.21 USD3,000,000 Ecopetrol SA 8.875% 13/01/2033 3,285 0.20 USD4,594,000 EDO Sukuk Ltd. 5.662% 03/07/2031 4,718 0.29
USD5,000,000 Empresa de Transmision Electrica SA 5.125% 02/05/2049
3,976 0.25
USD2,600,000 Empresa Distribuidora de Electricidad de Mendoza SA 9.75% 11/06/2033
2,514 0.16
USD2,660,000 First Abu Dhabi Bank PJSC Var 5.804% 16/01/2035 2,687 0.17 USD1,409,000 First Quantum Minerals Ltd. 7.25% 15/02/2034 1,439 0.09 USD3,100,000 First Quantum Minerals Ltd. 8% 01/03/2033 3,231 0.20 USD1,833,000 ForteBank JSC 7.75% 04/02/2030 1,888 0.12 USD2,750,000 Freeport Indonesia PT 5.315% 14/04/2032 2,728 0.17 USD2,250,000 Gaci First Investment Co. 6.25% 14/05/2056 2,247 0.14
USD4,500,000 Georgian Railway JSC 4% 17/06/2028 4,325 0.27 USD1,081,000 Global Bank Corp. Var 5.25% 16/04/2029 1,063 0.07 USD6,437,000 Green Palm Bidco SARL 5.9573% 30/06/2041 6,516 0.41 USD2,858,000 Green Palm Bidco SARL 6.4623% 30/06/2046 2,900 0.18
USD3,743,000 Greenko Wind Projects Mauritius Ltd. 7.25% 27/09/2028
3,766 0.23
USD2,235,000 Greensaif Pipelines Bidco SARL 6.51% 23/02/2042 2,359 0.15 USD631,000 GTLK Europe Capital DAC 4.65% 10/03/2027 b 0 0.00 USD3,208,000 GTLK Europe Capital DAC 4.65% 17/04/2060 b 0 0.00
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
88 Annual report and audited financial statements • June 2026
Page 91
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD2,212,000 GTLK Europe DAC 5.125% 31/05/2060 b 0 0.00 USD2,893,000 Hanwha Life Insurance Co. Ltd. Var 6.3% 24/06/2055 2,977 0.19 USD4,000,000 Heritage Petroleum Co. Ltd. 9% 12/08/2029 4,090 0.25 USD1,097,000 HTA Group Ltd. 6.75% 01/04/2031 1,111 0.07 USD2,259,000 HTA Group Ltd. 7.5% 04/06/2029 2,311 0.14
USD3,712,000 Hunt Oil Co. of Peru LLC Sucursal Del Peru 7.75% 05/11/2038
4,008 0.25
USD3,791,000 IHS Holding Ltd. 7.875% 29/05/2030 3,897 0.24 USD4,800,000 Indofood CBP Sukses Makmur Tbk. PT 3.398% 09/06/2031
4,391 0.27
USD2,169,000 Industrial Subordinated Trust 2 0 Var 6.55% 15/04/2036
2,192 0.14
USD3,815,000 InRetail Shopping Malls 5.65% 16/10/2032 3,761 0.23 USD2,090,000 Ipoteka-Bank ATIB 6.45% 09/10/2030 2,104 0.13 USD2,000,000 Jollibee Worldwide Pte. Ltd. 4.75% 24/06/2030 1,988 0.12 USD4,000,000 KazMunayGas National Co. JSC 5.75% 19/04/2047 3,830 0.24 USD7,250,000 KazMunayGas National Co. JSC 6.375% 24/10/2048 7,311 0.45
USD3,700,000 KFH Tier 1 Sukuk 2 Ltd. Var 6.25% Perpetual 3,699 0.23 USD1,997,934 Kingston Airport Revenue Finance Ltd. 6.75% 15/12/2036
2,008 0.13
USD1,600,000 Kosmos Energy Gta Holdings 11.25% 29/01/2031 1,633 0.10 USD802,000 Kosmos Energy Ltd. 7.75% 01/05/2027 795 0.05 USD2,490,000 Liberty Costa Rica Senior Secured Finance 10.875% 15/01/2031
2,600 0.16
USD3,504,000 Limak Yenilenebilir Enerji AS 9.625% 12/08/2030 3,496 0.22 USD4,500,000 Ma’aden Sukuk Ltd. 5.5% 13/02/2035 4,548 0.28
USD4,589,000 MAF Global Securities Ltd. Var 5.7477% Perpetual 4,338 0.27 USD610,000 MAF Global Securities Ltd. Var 7.875% Perpetual 614 0.04 USD3,784,000 Mauritius Commercial Bank Ltd. 6.15% 16/04/2031 3,766 0.23 USD3,113,000 Meituan 5.125% 05/11/2035 3,017 0.19 USD3,600,000 Metalsa SAPI de CV 3.75% 04/05/2031 3,184 0.20 USD1,697,000 MGM China Holdings Ltd. 6.25% 15/05/2033 1,663 0.10
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 89
Page 92
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD5,100,000 Millicom International Cellular SA 4.5% 27/04/2031 4,740 0.29 USD4,571,000 Minerva Luxembourg SA 7.5% 22/04/2036 4,352 0.27 USD1,807,000 Minerva Luxembourg SA 8.875% 13/09/2033 1,873 0.12
USD3,387,000 Montego Bay Airport Revenue Finance Ltd. 6.6% 15/06/2035
3,325 0.21
USD3,332,000 Muthoot Finance Ltd. 5.75% 04/08/2030 3,254 0.20 USD1,524,000 Muthoot Finance Ltd. 7.125% 14/02/2028 1,540 0.10
USD3,231,806 NAK Naftogaz Ukraine via Kondor Finance PLC 7.625% 08/11/2028
2,844 0.18
USD3,852,000 National Bank of Uzbekistan 7.2% 17/07/2030 3,988 0.25 USD2,388,000 Navoi Mining & Metallurgical Co. 6.7% 17/10/2028 2,448 0.15 USD2,600,000 NBK Tier 1 Ltd. Var 3.625% Perpetual 2,587 0.16 USD2,231,000 Nexa Resources SA 6.6% 08/04/2037 2,310 0.14 USD2,000,000 Nexa Resources SA 6.75% 09/04/2034 2,103 0.13 USD2,900,000 OCP SA 3.75% 23/06/2031 2,684 0.17 USD3,400,000 OCP SA 6.7% 01/03/2036 3,547 0.22
USD2,821,000 OCP SA Var 6.7405% Perpetual 2,804 0.17 USD1,992,000 OCP SA Var 7.3682% Perpetual 1,985 0.12 USD1,734,000 Orbia Advance Corp. SAB de CV 6.8% 13/05/2030 1,722 0.11 USD1,448,000 OTP Bank Nyrt Var 7.3% 30/07/2035 1,512 0.09 USD2,500,000 OTP Bank Nyrt Var 8.75% 15/05/2033 2,620 0.16 USD9,844,900 Petroleos de Venezuela SA 6% 16/05/2060 c 3,616 0.22 USD10,000,000 Petroleos Mexicanos 6.625% 15/06/2035 9,687 0.60 USD3,000,000 Piramal Finance Ltd. 7.8% 29/01/2028 3,053 0.19 USD3,080,000 Port of Spain Waterfront Development 7.875% 19/02/2040
3,198 0.20
USD5,700,000 Prosus NV 3.832% 08/02/2051 3,816 0.24 USD3,375,000 Puma International Financing SA 7.75% 25/04/2029 3,455 0.21 USD5,500,000 QatarEnergy 3.125% 12/07/2041 4,172 0.26 USD2,690,000 QNB Bank AS 5.875% 11/02/2031 2,607 0.16 USD1,625,000 Rede D’or Finance SARL 4.95% 17/01/2028 1,607 0.10
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
90 Annual report and audited financial statements • June 2026
Page 93
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD2,943,000 Rede D’or Finance SARL 6.55% 28/04/2036 2,849 0.18 USD2,320,000 Renew Treasury Ifsc Pvt Ltd. 6.5% 02/02/2031 2,297 0.14 USD3,300,000 Riyad Sukuk Ltd. Var 6.209% 14/07/2035 3,319 0.21 USD2,840,000 Saavi Energia SARL 8.875% 10/02/2035 3,099 0.19 USD2,600,000 Sable International Finance Ltd. 7.125% 15/10/2032 2,581 0.16
USD3,033,000 Sagicor Financial Co. Ltd. 5.3% 13/05/2028 3,023 0.19 USD3,100,000 Saudi Arabian Oil Co. 5.375% 02/06/2035 3,131 0.19 USD4,500,000 Saudi Arabian Oil Co. 6.375% 02/06/2055 4,585 0.29 USD2,074,000 Sitios Latinoamerica SAB de CV 5.375% 04/04/2032 2,058 0.13
USD4,500,000 Sociedad Quimica y Minera de Chile SA 5.5% 10/09/2034
4,498 0.28
USD3,700,000 Sovcombank Via SovCom Capital DAC Var 8% 07/04/2030 b
0 0.00
USD3,900,000 Standard Chartered PLC Var 4.3% Perpetual 3,743 0.23 USD4,609,000 Standard Chartered PLC Var 7% Perpetual 4,632 0.29 USD2,649,000 Telecommunications Co. Telekom Srbija AD Belgrade 7.25% 18/05/2031
2,643 0.16
USD6,300,000 Tencent Holdings Ltd. 3.24% 03/06/2050 4,372 0.27
USD1,956,000 Trinidad Generation UnLtd. 7.75% 16/06/2033 2,056 0.13 USD2,859,000 Turkiye Garanti Bankasi AS Var 7.625% 15/04/2036 2,837 0.18 USD1,500,000 Turkiye Garanti Bankasi AS Var 8.125% 03/01/2035 1,520 0.09
USD2,000,000 Uzbek Industrial & Construction Bank ATB 8.95% 24/07/2029
2,148 0.13
USD5,671,000 Uzbekneftegaz JSC 8.75% 07/05/2030 6,093 0.38 USD4,000,000 Veon Midco BV 7.45% 01/06/2033 3,994 0.25 USD2,650,000 WE Soda Investments Holding PLC 9.5% 06/10/2028 2,661 0.17
USD3,130,830 WOM Chile Holdco SpA 5% 01/04/2032 (WOM Chile Holdco SpA)
2,799 0.17
USD2,648,271 WOM Mobile SA 11% 01/04/2031 2,736 0.17 USD4,700,000 Xiaomi Best Time International Ltd. 4.1% 14/07/2051 3,655 0.23 USD1,516,449 Yinson Boronia Production BV 8.947% 31/07/2042 1,670 0.10 USD3,416,667 YPF SA 8.75% 11/09/2031 3,626 0.23
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 91
Page 94
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Corporate bonds (continued)
USD316,304 Yuzhou Group Holdings Co. Ltd. 1% 30/06/2034 c 3 0.00 USD259,089 Yuzhou Group Holdings Co. Ltd. 4% 30/06/2028 c 9 0.00 USD452,263 Yuzhou Group Holdings Co. Ltd. 4.5% 30/06/2029 c 13 0.00 USD605,135 Yuzhou Group Holdings Co. Ltd. 5% 30/06/2030 c 15 0.00 USD850,932 Yuzhou Group Holdings Co. Ltd. 5.5% 30/06/2031 c 21 0.00 USD308,582 Yuzhou Group Holdings Co. Ltd. 7% 30/06/2027 c 21 0.00 USD3,900,000 Zhongsheng Group Holdings Ltd. 5.98% 30/01/2028 3,703 0.23
Government bonds 450,733 28.01 28.16 USD2,725,000 African Export-Import Bank 3.798% 17/05/2031 2,489 0.15 USD2,750,000 Angola Government International Bonds 9.375% 31/03/2033
2,805 0.17
USD6,663,000 Angola Government International Bonds 9.375% 08/05/2048
6,403 0.40
USD2,065,000 Angola Government International Bonds 9.875% 31/03/2037
2,128 0.13
USD19,035,443 Argentina Republic Government International Bonds 3.5% 09/07/2041
14,250 0.89
USD8,170,041 Argentina Republic Government International Bonds 4.125% 09/07/2035
6,543 0.41
USD7,100,000 Bahamas Government International Bonds 8.25% 24/06/2036
7,958 0.49
USD2,200,000 Bahrain Government International Bonds 7.375% 14/05/2030
2,238 0.14
USD2,300,000 Bahrain Government International Bonds 7.5% 12/02/2036
2,337 0.15
USD7,538,000 Baiterek National Investment Holding JSC 4.65% 01/10/2030
7,428 0.46
USD3,956,000 Baiterek National Investment Holding JSC 5.2% 06/05/2033
3,929 0.24
USD435,000 Baiterek National Investment Holding JSC 5.45% 08/05/2028
438 0.03
USD9,800,000 Barbados Government International Bonds 8% 26/06/2035
10,468 0.65
USD457,356 Bolivia Government International Bonds 4.5% 20/03/2028
438 0.03
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
92 Annual report and audited financial statements • June 2026
Page 95
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Government bonds (continued)
USD951,000 Bolivia Government International Bonds 9.45% 14/05/2031
972 0.06
USD7,000,000 Brazil Government International Bonds 4.75% 14/01/2050
5,184 0.32
USD2,300,000 Brazil Government International Bonds 5.5% 04/02/2033
2,272 0.14
USD3,300,000 Chile Government International Bonds 5.33% 05/01/2054
3,188 0.20
USD2,000,000 City of Ulaanbaatar Mongolia 7.75% 21/08/2027 2,036 0.13 USD2,059,000 Ciudad Autonoma De Buenos Aires/Government Bonds 7.8% 26/11/2033
2,164 0.13
USD7,800,000 Colombia Government International Bonds 5.625% 26/02/2044
6,743 0.42
USD780,000 Colombia Government International Bonds 6.125% 21/01/2031
789 0.05
USD3,878,000 Corp. Financiera de Desarrollo SA 5.5% 06/05/2030 3,938 0.24
USD3,300,000 Costa Rica Government International Bonds 5.625% 30/04/2043
3,181 0.20
USD3,750,000 Development Bank of Mongolia LLC 6.9% 02/07/2031 3,711 0.23
USD4,000,000 Dominican Republic International Bonds 4.875% 23/09/2032
3,801 0.24
USD4,092,000 Dominican Republic International Bonds 5.875% 28/10/2035
4,051 0.25
USD2,491,000 Dominican Republic International Bonds 6.15% 17/05/2038
2,477 0.15
USD4,773,000 Dominican Republic International Bonds 6.95% 15/03/2037
5,064 0.31
USD10,636,364 Ecuador Government International Bonds 5% 31/07/2040
8,882 0.55
USD3,772,000 Ecuador Government International Bonds 8.75% 29/01/2034
3,794 0.24
USD6,883,000 Egypt Government International Bonds 8.7002% 01/03/2049
6,790 0.42
USD8,485,000 Egypt Government International Bonds 8.875% 29/05/2050
8,471 0.53
USD4,500,000 El Salvador Government International Bonds 7.65% 15/06/2035
4,633 0.29
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 93
Page 96
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Government bonds (continued)
USD13,000,000 Finance Department Government of Sharjah 4% 28/07/2050
8,546 0.53
USD3,500,000 Finance Department Government of Sharjah 4.375% 10/03/2051
2,438 0.15
USD2,550,000 Gabon Government International Bonds 6.625% 06/02/2031
2,189 0.14
USD2,700,000 Gabon Government International Bonds 9.5% 18/02/2029
2,573 0.16
USD8,930,000 Georgia Government International Bonds 5.125% 28/01/2031
8,697 0.54
USD2,231,250 Ghana Government International Bonds 5% 03/07/2029
2,197 0.14
USD6,770,632 Ghana Government International Bonds 5% 03/07/2035
6,277 0.39
USD6,000,000 Guatemala Government Bonds 3.7% 07/10/2033 5,326 0.33 USD4,000,000 Guatemala Government Bonds 6.6% 13/06/2036 4,259 0.26
USD3,800,000 Honduras Government International Bonds 5.625% 24/06/2030
3,784 0.24
USD3,720,000 Honduras Government International Bonds 8.625% 27/11/2034
4,293 0.27
USD2,800,000 Hungary Government International Bonds 5.375% 26/09/2030
2,843 0.18
USD3,400,000 Hungary Government International Bonds 6.25% 22/09/2032
3,603 0.22
USD1,400,000 Istanbul Metropolitan Municipality 10.5% 06/12/2028 1,501 0.09
USD1,663,000 Ivory Coast Government International Bonds 6.75% 25/02/2041
1,610 0.10
USD7,990,000 Kuwait International Government Bonds 4.652% 09/10/2035
7,809 0.49
USD6,529,000 Kyrgyz Republic International Bonds 7.75% 03/06/2030
6,612 0.41
USD3,717,000 Mexico Government International Bonds 5.375% 22/03/2033
3,646 0.23
USD7,300,000 Mexico Government International Bonds 6.125% 09/02/2038
7,189 0.45
USD2,100,000 Montenegro Government International Bonds 7.25% 12/03/2031
2,223 0.14
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
94 Annual report and audited financial statements • June 2026
Page 97
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Government bonds (continued)
USD6,986,000 Nigeria Government International Bonds 7.375% 28/09/2033
7,037 0.44
USD3,250,000 Nigeria Government International Bonds 9.1297% 13/01/2046
3,597 0.22
USD6,852,000 Pakistan Government International Bonds 8.875% 08/04/2051
6,892 0.43
USD4,896,000 Papua New Guinea Government International Bonds 8.375% 04/10/2028
5,112 0.32
USD9,055,000 Paraguay Government International Bonds 6.1% 11/08/2044
9,273 0.58
USD5,714,000 Provincia de Cordoba 8.6% 03/02/2035 5,669 0.35 USD4,324,000 Republic of Armenia International Bonds 6.75% 12/03/2035
4,531 0.28
USD8,947,000 Republic of Azerbaijan International Bonds 3.5% 01/09/2032
8,346 0.52
USD1,578,000 Republic of Kenya Government International Bonds 8.7% 26/02/2039
1,569 0.10
USD2,320,000 Republic of Kenya Government International Bonds 8.8% 09/10/2038
2,344 0.15
USD6,500,000 Republic of Kenya Government International Bonds 9.5% 05/03/2036
6,911 0.43
USD9,100,000 Republic of South Africa Government International Bonds 5.375% 24/07/2044
7,731 0.48
USD4,500,000 Republic of South Africa Government International Bonds 5.75% 30/09/2049
3,825 0.24
USD3,143,000 Republic of South Africa Government International Bonds 6.125% 11/12/2037
3,087 0.19
USD7,328,000 Republic of South Africa Government International Bonds 7.95% 19/11/2054
7,911 0.49
USD4,883,500 Republic of Tajikistan International Bonds 7.125% 14/09/2027
4,890 0.30
USD4,000,000 Saudi Government International Bonds 4.5% 26/10/2046
3,340 0.21
USD8,000,000 Saudi Government International Bonds 5% 18/01/2053
6,914 0.43
USD3,400,000 Senegal Government International Bonds 6.75% 13/03/2048
1,759 0.11
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 95
Page 98
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) US dollar denominated bonds (continued) Government bonds (continued)
USD1,500,000 Senegal Government International Bonds 7.75% 10/06/2031
801 0.05
USD1,800,000 Sri Lanka Government International Bonds 3.1% 15/01/2030
1,820 0.11
USD5,111,580 Sri Lanka Government International Bonds 3.35% 15/03/2033
4,880 0.30
USD2,886,148 Sri Lanka Government International Bonds 3.6% 15/02/2038
2,896 0.18
USD3,023,000 Suriname Government International Bonds 7.7% 06/11/2030
3,145 0.20
USD11,500,000 Turkiye Government International Bonds 4.875% 16/04/2043
8,733 0.54
USD9,000,000 Turkiye Government International Bonds 5.75% 11/05/2047
7,308 0.45
USD7,800,000 Turkiye Government International Bonds 6.625% 17/02/2045
7,102 0.44
USD6,400,000 Turkiye Government International Bonds 6.875% 14/01/2038
6,285 0.39
USD2,500,000 Turkiye Government International Bonds 6.95% 16/09/2035
2,508 0.16
USD3,500,000 Turkiye Ihracat Kredi Bankasi AS 6.375% 03/10/2030 3,426 0.21 USD30,500,000 U.S. Treasury Bonds 1.75% 15/08/2041 20,654 1.28 USD12,500,000 U.S. Treasury Notes 4% 15/11/2035 12,158 0.76
USD6,246,433 Ukraine Government International Bonds 3% 01/02/2036
3,709 0.23
USD7,176,223 Ukraine Government International Bonds 4.5% 01/02/2034
5,001 0.31
USD5,454,102 Ukraine Government International Bonds 4.5% 01/02/2035
3,744 0.23
USD10,000,000 Venezuela Government International Bonds 7% 31/03/2038 c
4,247 0.26
USD12,419,550 Vietnam Government International Bonds 5.5% 12/03/2028
11,970 0.74
Uzbekistani som denominated bonds 16,126 1.00 1.04 Government bonds 16,126 1.00 1.04 UZS34,270,000,000 Republic of Uzbekistan International Bonds 12.25% 13/04/2029
2,895 0.18
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
96 Annual report and audited financial statements • June 2026
Page 99
Holding as at 30.06.26 $’000
as at 30.06.26 %
as at 30.06.25 % Fixed income (continued) Uzbekistani som denominated bonds (continued) Government bonds (continued)
UZS56,250,000,000 Republic of Uzbekistan International Bonds 15.5% 25/02/2028
4,971 0.31
UZS61,670,000,000 Republic of Uzbekistan International Bonds 16.25% 12/10/2026
5,203 0.32
UZS35,130,000,000 Republic of Uzbekistan International Bonds 16.625% 29/05/2027
3,057 0.19
Derivatives (3,355) (0.21) 0.25 Forwards 1,639 0.10 (0.07)
Sold EUR77,100,000 for USD89,848,739 Settlement 23/09/2026
1,639 0.10
Forwards for share class hedging (4,994) (0.31) 0.32 Bought GBP418,853,396 for USD559,495,252 Settlement 15/07/2026
(5,128) (0.32)
Sold GBP13,277,343 for USD17,707,288 Settlement 15/07/2026
134 0.01
Total portfolio 1,573,019 97.76 96.67 Net other assets/(liabilities) 36,117 2.24 3.33
Net assets attributable to shareholders 1,609,136 100.00 100.00
a Suspended. b M&G’s Valuation Sub Committee are valuing these securities at £nil until further notice. c Defaulted bond.
M&G Emerging Markets Bond Fund
Portfolio statement
Investments (continued)
Annual report and audited financial statements • June 2026 97
Page 100
Top ten portfolio transactions for the year to 30 June 2026
Largest purchases $’000 Republic of Poland Government Bonds 5% 25/10/2035 25,426 Republic of Poland Government Bonds 4.5% 25/07/2030 24,928
U.S. Treasury Notes 4% 15/11/2035 14,216 Brazil Notas do Tesouro Nacional 10% 01/01/2033 9,109 Georgia Government International Bonds 5.125% 28/01/2031 8,833 Petroleos Mexicanos 6.625% 15/06/2035 8,810 Turkiye Government Bonds 31.08% 08/11/2028 8,672 Nigeria Government Bonds 19.89% 15/05/2033 8,245
Colombia Government International Bonds 5% 19/09/2032 8,163 Republic of Poland Government Bonds 6% 25/10/2033 8,098
Other purchases 687,036
Total purchases 811,536
Largest sales $’000 Republic of Poland Government Bonds 6% 25/10/2033 26,525 Republic of Poland Government Bonds 4.5% 25/07/2030 25,729
U.S. Treasury Inflation-Indexed Notes 1.875% 15/07/2034 20,885 Viet Nam Debt & Asset Trading Corp. 1% 10/10/2025 16,239 Romania Government Bonds 8.75% 30/10/2028 12,582 Romania Government International Bonds 6.375% 18/09/2033 12,504 Czech Republic Government Bonds 4.5% 11/11/2032 11,491 Nigeria OMO Bills 0% 09/12/2025 8,892 Egypt Treasury Bills 0% 24/02/2026 8,273
Development Bank of Kazakhstan JSC 5.625% 07/04/2030 7,973
Other sales 488,667
Total sales 639,760
Purchases and sales exclude the cost and proceeds of ‘AAA’ rated money market funds.
M&G Emerging Markets Bond Fund
Portfolio statement
98 Annual report and audited financial statements • June 2026
Page 101
Fund performance
Please note past performance is not a guide to future performance and the value of investments, and the income from them, will fluctuate. This will cause the fund price to fall as well as rise and you may not get back the original amount you invested.
As different share classes have different attributes, for example charging structures and minimum investments, please be aware that their performance may be different.
For additional information, including monthly fund commentaries, fund facts, historic prices, distribution rates, performance information (including a range of performance graphs) and other documents, please visit our website at mandg.com/investments
Long-term performance by share class To give an indication of the performance of the fund, the following table shows the compound rate of return, per annum, over the period. Calculated on a price to price basis with income reinvested and shown as net of operating charge. Please refer to ‘Specific share class performance’ tables for the share class launch dates.
Share class One year % a
Three years % pa
Five years % pa
Ten years % pa Sterling Class ‘A’ Income +15.3 +8.2 +4.8 +4.7 Class ‘A’ Accumulation +15.3 +8.1 +4.8 +4.7 Class ‘I’ Income +15.7 +8.6 +5.2 +5.2 Class ‘I’ Accumulation +15.8 +8.6 +5.2 +5.2 Class ‘I-H’ Income +11.5 +9.8 +3.5 +3.9
Class ‘I-H’ Accumulation +11.5 +9.7 +3.4 +3.9 Class ‘PP’ Income +15.9 +8.7 +5.3 n/a Class ‘PP’ Accumulation +15.9 +8.7 +5.3 n/a
Class ‘PP-H’ Income +11.6 +9.9 +3.6 n/a Class ‘PP-H’ Accumulation +11.6 +9.8 +3.6 n/a Class ‘R’ Income +15.4 +8.3 +5.0 +4.9
Class ‘R’ Accumulation +15.5 +8.3 +4.9 +4.9 Benchmark +12.4 +7.0 +3.3 +3.7
a Not annualised.
Specific share class performance
The following comparative tables show the performance of each share class. All ‘Performance and charges’ percentages represent an annual rate except for the ‘Return after operating charges’ which is calculated as a percentage of the opening net asset value per share (NAV per share).
‘Operating charges’ and ‘Direct transaction costs’ are calculated as a percentage of average net asset value. Where there is a change in the charging structure, you may see variances in the ‘operating charges’ between the comparative and current year figures.
The closing NAV per share shown may diverge from the highest and lowest share prices (used for dealing purposes) as at the balance sheet date due to accounting and valuation adjustments.
M&G Emerging Markets Bond Fund
Financial highlights
Annual report and audited financial statements • June 2026 99
Page 102
Sterling Class ‘A’ Income shares The share class was launched on 1 October 2002.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 71.02 74.93 74.84
Return before operating charges*
11.92 2.75 6.41
Operating charges (0.83) (0.82) (0.83)
Return after operating charges*
11.09 1.93 5.58
Distributions (5.75) (5.84) (5.49)
Closing NAV 76.36 71.02 74.93 *after direct transaction cost of 0.01 0.02 0.00
Performance Return after charges (%) 15.62 2.58 7.46
Other information Closing NAV ($’000) 7,441 7,468 7,337 Number of shares 7,362,500 7,674,697 7,736,891 Operating charges (%) 1.08 1.08 1.08 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 79.79 79.13 80.10
Lowest share price (UK p) 71.30 72.13 73.89
Sterling Class ‘A’ Accumulation shares The share class was launched on 1 October 2002.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 268.85 262.33 244.11
Return before operating charges*
45.57 9.45 20.96
Operating charges (3.18) (2.93) (2.74)
Return after operating charges*
42.39 6.52 18.22
Distributions (18.95) (17.92) (15.51) Retained distributions 18.95 17.92 15.51
Closing NAV 311.24 268.85 262.33
*after direct transaction cost of 0.04 0.06 0.00 Performance Return after charges (%) 15.77 2.49 7.46
Other information Closing NAV ($’000) 8,487 8,522 9,200 Number of shares 2,060,358 2,313,369 2,770,955 Operating charges (%) 1.08 1.08 1.08 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 313.33 284.03 268.94 Lowest share price (UK p) 269.79 259.70 240.95
M&G Emerging Markets Bond Fund
Financial highlights
100 Annual report and audited financial statements • June 2026
Page 103
Sterling Class ‘I’ Income shares The share class was launched on 19 April 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 99.62 104.67 104.13
Return before operating charges*
16.74 3.84 8.92
Operating charges (0.73) (0.72) (0.72)
Return after operating charges*
16.01 3.12 8.20
Distributions (8.08) (8.17) (7.66)
Closing NAV 107.55 99.62 104.67 *after direct transaction cost of 0.01 0.02 0.00
Performance Return after charges (%) 16.07 2.98 7.87
Other information Closing NAV ($’000) 192,336 167,049 153,409 Number of shares 135,115,629 122,373,811 115,798,733 Operating charges (%) 0.68 0.68 0.68 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 112.38 110.73 111.67
Lowest share price (UK p) 100.01 101.10 102.83
Sterling Class ‘I’ Accumulation shares The share class was launched on 19 April 2012.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 204.86 199.13 184.55
Return before operating charges*
34.80 7.13 15.89
Operating charges (1.53) (1.40) (1.31)
Return after operating charges*
33.27 5.73 14.58
Distributions (15.37) (14.45) (12.51) Retained distributions 15.37 14.45 12.51
Closing NAV 238.13 204.86 199.13
*after direct transaction cost of 0.03 0.05 0.00 Performance Return after charges (%) 16.24 2.88 7.90
Other information Closing NAV ($’000) 440,936 419,291 555,292 Number of shares 139,901,133 149,367,946 220,330,996 Operating charges (%) 0.68 0.68 0.68 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 239.71 216.12 204.01 Lowest share price (UK p) 205.60 197.15 182.18
M&G Emerging Markets Bond Fund
Financial highlights
Annual report and audited financial statements • June 2026 101
Page 104
Sterling Class ‘I-H’ Income shares The share class was launched on 24 July 2015.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 74.31 72.42 72.48
Return before operating charges*
9.40 8.20 5.77
Operating charges (0.56) (0.53) (0.52)
Return after operating charges*
8.84 7.67 5.25
Distributions (5.87) (5.78) (5.31)
Closing NAV 77.28 74.31 72.42 *after direct transaction cost of 0.01 0.02 0.00
Performance Return after charges (%) 11.90 10.59 7.24
Other information Closing NAV ($’000) 105,578 96,994 153,605 Number of shares 103,222,677 95,250,758 167,585,408 Operating charges (%) 0.71 0.71 0.71 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 80.81 77.73 78.04
Lowest share price (UK p) 74.60 71.54 69.26
Sterling Class ‘I-H’ Accumulation shares The share class was launched on 24 July 2015.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 138.17 124.52 116.11
Return before operating charges*
17.58 14.59 9.27
Operating charges (1.05) (0.94) (0.86)
Return after operating charges*
16.53 13.65 8.41
Distributions (10.06) (9.20) (7.80) Retained distributions 10.06 9.20 7.80
Closing NAV 154.70 138.17 124.52
*after direct transaction cost of 0.02 0.03 0.00 Performance Return after charges (%) 11.96 10.96 7.24
Other information Closing NAV ($’000) 285,386 242,575 198,185 Number of shares 139,384,390 128,123,532 125,754,789 Operating charges (%) 0.71 0.71 0.71 Direct transaction costs (%) 0.01 0.02 0.00
Prices Highest share price (UK p) 155.84 139.17 127.11 Lowest share price (UK p) 138.64 124.73 110.89
M&G Emerging Markets Bond Fund
Financial highlights
102 Annual report and audited financial statements • June 2026
Page 105
Sterling Class ‘PP’ Income shares The share class was launched on 5 August 2019.
for the year to 30 June 2026 2025 2024 Change in NAV per share UK p UK p UK p Opening NAV 71.74 75.30 74.86
Return before operating charges*
12.06 2.76 6.39
Operating charges (0.45) (0.44) (0.44)
Return after operating charges*
11.61 2.32 5.95
Distributions (5.82) (5.88) (5.51)
Closing NAV 77.53 71.74 75.30 *after direct transaction cost of 0.01 0.02 0.00
Performance Return after charges (%) 16.18 3.08 7.95
Other information Closing NAV ($’000) 40,029 34,287 75,885
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