M&G Credit Income Investment Trust Plc · LSE:MGCI
M&G Credit Income Investment Trust — Shareholder Meeting (June 2023)
18 slides from M&G Credit Income Investment Trust's shareholder meeting presentation, June 2023
Slide 1: M&G Credit Income Investment Trust
M&G Credit Income Investment Trust June 2023 (AGM) Marketing communication for investment professionals only
Slide 2: Regulatory Disclosures
Regulatory Disclosures* M&G Credit Income Investment Trust Risks associated with the Company • The value of investments will fluctuate, which will cause share prices to fall as well as rise and you may not get back the original amount you invested. There is no guarantee that the Company’s Investment
Slide 3: Trust features are compelling in today's economic backdrop
M&G Credit Income Investment Trust Trust features are compelling in today’s economic backdrop Floating Investment Low NAV Diversifier to Vast M&G Cash+ stable rate structure grade quality volatility public credit expertise income stream We aim to deliver floating rate, high yield-like returns with i
Slide 4: The UK's only fixed income investment trust with an overall investment grade rating
The UK’s only fixed income investment trust with an overall investment grade rating M&G European Cash Portfolio snapshot as at 30 April 2023 Loan Fund 1% AAA 11% 3% AA D 6% Name Value CCC 0% A Number of Holdings 137 0% 6% Yield to worst 9.11% B 8% Weighted average coupon 6.7% Modified duration 1.2 S
Slide 5: A blend of public and private credit provides overall lower NAV volatility
A blend of public and private credit provides overall lower NAV volatility A trust that focuses on stable income streams 130 125 Total return rebased to 100 (30/11/2018) 120 115 110 105 100 95 90 85 80 European Loan index (floating rate) HY Floating Rate Notes Sterling BBB Corps (fixed rate) Gilt in
Slide 6: Provides high-yield like returns from investment grade assets
Provides high-yield like returns from investment grade assets M&G Credit Income Investment Trust YTM vs fixed rate £BBBs and high yield credit 14 12 10 8 6 4 2 0 Sterling IG Corporates YTM Sterling HY Corporates YTM MGCI YTM Source: M&G, Bloomberg, 31 May 2023 YTM Yield to Maturity 6
Slide 7: Macro and valuation
Macro and valuation
Slide 8: Where are we in the economic cycle?
Where are we in the economic cycle? It’s time for credit, especially investment grade Positive Economic growth Negative Economic growth Early recovery Peak Slowdown Early contraction Late contraction to to expansion early recovery Confidence High Drops Low Picks up Increases Inflation Picks up gradu
Slide 9: IG credit now offering very attractive risk-weighted returns
IG credit now offering very attractive risk-weighted returns Market pricing c.13% default rate for BBB bonds, whilst history tells us this is highly improbable 80% Implied default rate Average default rate* Worst default rate* 70% 60% 5y cumulative default rate 50% 40% 30% 20% 10% 0% AA A BBB BB B C
Slide 10: Portfolio positioning and Performance
Portfolio positioning and Performance
Slide 11: Diversified portfolio with a blend of public and private assets
M&G Credit Income Investment Trust (MGCI) Diversified portfolio with a blend of public and private assets ABS (HY) Leveraged Loans 3.49% 11.21% ABS (IG) 13.80% Subordinated/Hybrid Bond 10.83% Private: 59% Commercial Mortgage Loans 10.98% Public: 41% Senior Bond (IG) 11.37% Senior Bond (HY) 1.82% Sen
Slide 12: Recent Private Transactions
Recent Private Transactions M&G Lion Credit Opportunity Fund IV • We invested £2m into the M&G Lion Credit Opportunity Fund IV. The fund invests primarily in high grade European ABS and targets a net income to investors of SONIA/Euribor +1 - 3% for on average AA risk, although the discount to par pr
Slide 13: Transaction spotlight
Transaction spotlight ICSL 2 B • We hold £1.25m of ICSL 2 B, a quasi-private securitisation of UK student loans sponsored by the Secretary of State for Education in 2018. The transaction is an interesting piece of esoteric lending which acts as a good example of the type of income producing product
Slide 14: Recent Private Transactions
Recent Private Transactions XxxX 2022 (A) • We purchased £2.2m of the senior tranche in a bilateral securitisation with a leading European tech subscription platform offering customers a unique way of leasing tech products such as phones, tablets and laptops, but also extending to drones and cameras
Slide 15: Trust performance since inception
M&G Credit Income Investment Trust (MGCI) Trust performance since inception Total return 125 120 115 110 105 100 95 90 Nov-18 Jan-19 Apr-19 Jul-19 Oct-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Mid-market price total return Net asset v
Slide 16: Market Outlook
Market Outlook • Headwinds remain but the risk-adjusted returns offered by investment grade credit provide good downside protection and make this area of the market look attractive right now • Technical elements (supply/demand imbalance, attractive all-in yields) remain supportive for credit spreads
Slide 17: Company outlook
Company outlook • Dividends to increase as SONIA rises in line with rates, mitigating rising inflation (85% of portfolio is floating rate) • Focus on investing into BBB public corporates and higher quality ABS/CLO tranches • Continue to add private assets where attractive returns are available – abi
Slide 18: Disclaimer
Disclaimer This financial promotion is issued by M&G Alternatives Investment Management Limited which is authorised and regulated by the Financial Conduct Authority. This communication is only intended for and will be only distributed to persons resident in jurisdictions where such distribution or a
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