Asset manager M&G Investments has launched a fund to help Italian savers shift from bonds to equities at a time when inflation is decreasing the value of cash-heavy household portfolios.
The launch of the fund, the M&G (Lux) Step Into Equity Income 2030 Fund, came when many Italian households are still keeping much of their savings in bank deposits. This offers minimal returns and leaves their money vulnerable to being eaten away by inflation, highlighted M&G.
The fund’s ‘step-in’ mechanism enables investors to gradually shift from bonds into dividend-paying equities, aiming to reduce volatility while building sustainable income, shared the asset manager.
The portfolio allocates 80% to fixed income via M&G’s actively managed investment-grade credit strategies. 20% of it is allocated to global equities aligned with the M&G Global Dividend strategy. Over the next five years, the equity share will rise step-by-step to reach 100% by October 2030.
M&G said the approach reflects a broader market shift where equities are viewed as a reliable income source, offering both attractive yields and the potential for dividend growth. With a minimum investment of €1,000, the strategy targets savers who remain cautious about equity markets and rely heavily on traditional bonds and deposits.
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The equity component is managed by Stuart Rhodes, lead manager of the M&G Global Dividend strategy since 2008, which focuses on high-quality businesses with a record of growing dividends.
Andrea Orsi, country head of Italy, M&G Investments, commented: “In a world where inflation is persistent and the future is increasingly uncertain with geopolitics and changing demographics, keeping money idle is not an efficient strategy. This fund is designed to support Italian savers in taking their first steps into equity markets— where they gradually move from fixed income to equities with a strong focus on income generation.”
Rhodes said: “Dividends provide an ideal solution, in our view, for investors looking for reliable, inflation-beating cash flows that can support their financial goals across market cycles. Dividend-paying equities, which can be found across a variety of sectors from the defensive areas of healthcare and consumer goods to the faster-growing realm of technology, can offer an attractive combination of income, growth, and resilience, especially when selected through an active, quality-focused lens.”
