REG-M&G Credit Income Investment Trust plc Quarterly Review

M&G Credit Income Investment TrustAnnouncement

21/01/2026 13:00

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M&G Credit Income Investment Trust plc (MGCI)
Quarterly Review

21-Jan-2026 / 12:55 GMT/BST

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M&G CREDIT INCOME INVESTMENT TRUST PLC

 

(the “Company”)

 

LEI: 549300E9W63X1E5A3N24

 

Quarterly Review

 

The Company announces that its quarterly review as  at 31 December 2025 is now available,  a summary of which is provided below.  The full quarterly review is available on  the
Company’s website at:

 

 1 https://www.mandg.com/dam/investments/common/gb/en/documents/funds-literature/credit-income-investment-trust/mandg_credit-income-investment-trust_quarterly-review_gb_eng.pdf

 

 

Market Review

 

Global markets ended the year on a constructive note, supported by easing inflation, resilient economic data, and dovish central bank signals. October saw risk assets buoyed by
the US-China trade truce and solid earnings, while UK inflation surprised lower at  3.8%, triggering a gilt rally and reinforcing expectations for further Bank of England  rate
cuts. Eurozone inflation held near target, allowing the  ECB to maintain its wait-and-see stance. Credit markets  reflected a risk-on tone with sterling IG spreads  tightening,
despite surging US issuance linked to the AI boom.

 

November began with volatility as AI bubble concerns and a US government shutdown weighed on sentiment, but mid-month saw a sharp reversal as softer labour data and dovish  Fed
commentary drove repricing for a December cut, lifting risk assets. In the UK, the Autumn  Budget passed with a fairly muted reaction and failed to turn into the negative  risk
event many had feared, as the announcement of larger than expected fiscal headroom reinforced investor confidence.

 

December capped the quarter with a supportive backdrop for fixed income. Inflation undershot forecasts across major economies, bolstering rate-cutting cycles and driving strong
demand for high-quality bonds. The ECB upgraded  growth and core inflation forecasts for 2026,  while US GDP surged to 4.3%, its  fastest pace in two years. UK growth  remained
sluggish at 1.3%, prompting the  Bank of England to cut  rates to 3.75%. Credit markets  benefited from seasonally light supply,  steady inflows, and subdued default  activity,
supporting outperformance in sterling IG  and positive compression in HY.  Overall, resilient fundamentals and easing  inflation underpinned investor confidence into  year-end,
despite lingering concerns over AI valuations and global bond market tensions.

 

Manager Commentary

 

In the fourth quarter of the year the Company delivered a NAV total return of +1.27% compared to the +2.01% returned by the benchmark. Underperformance was driven by  defensive
positioning in the  portfolio which  has meant foregoing  yield in  the short term  as we  await for market  conditions to  present, what in  our opinion,  are more  attractive
opportunities to add risk and drive performance over the long term.

 

During the quarter we continued to see sustained demand for share issuance, with proceeds  from the sale of new ordinary shares amounting to £7.3m. Pleasingly, we were able  to
deploy this into private or  illiquid deals, including two  new regulatory capital transactions  (£3.2m): one backed by  a portfolio of Asset  Backed  Lending and Super  Senior
Facilities to US corporates,  and the other backed  by UK auto loans.  We added £1.5m to  our existing position in  IG supermarket securitisation Delamare,  which has a  public
listing but is highly illiquid. We  also invested proceeds into the  M&G European Loan fund (£2.5m), a  cornerstone investment of the portfolio  since launch, and added to  our
holding in the M&G Investment Grade ABS fund (£3m) which has an underlying credit quality of AA.

 

We invested selectively in new  issues where we appraised there  to be a ‘decent’  credit spread on offer within  the context of very expensive  credit markets. Often, what  we
considered to be more attractive  relative value, was found by  identifying expected survivors in embattled  sectors such as UK water  (SWS Finance), EU chemicals (Ineos),  and
Autos (Ford).

 

Outlook

 

Global growth should remain resilient in  2026 supported by fading tariff uncertainty  and boosted by fiscal stimulus. However,  a complex and challenging backdrop remains.  US
growth is expected to  remain “exceptional” versus peers,  on the back  of the stimulative effects  of President Trump's  "One Big Beautiful Bill  Act" (OBBBA), which  includes
significant tax cuts and spending changes designed to drive domestic activity. The US is  also expected to be the primary source of risk in the coming year, with  unpredictable
foreign policy creating further  global instability and  the deficit impact of  OBBBA pressuring fiscal  policy. Both present policy  risks that could  trigger a resurgence  in
inflation and have potentially wider implications for global bond yields.

 

Stubborn core inflation has remained notably above target in the US and UK,  especially in services, and pressure from the UK government’s growth agenda and political  rhetoric
from President Trump increases the chances of central  bank policy error. Stimulus measures in Germany and  Japan could also pressure interest rates. While resurgent  inflation
isn’t our base case, financial markets have consistently  priced in more aggressive interest rate cuts than  have materialised, and current pricing for a “goldilocks”  scenario
does not fully account for this risk.

 

Finally, we cannot ignore  the elephant in the  room—Artificial Intelligence (AI), which  competes with “tariff”  for the economic buzzword  of 2025. The AI  boom has become  a
central pillar of the U.S. economy, bringing both transformative potential and concentrated systemic risks across GDP, financial markets, and the labour force. AI-linked  capex
has remained a major macro and earnings tailwind—but expectations need to be proven as markets shift to a “show-me” regime. Recent market swings have already shown how  rapidly
investor sentiment can sour and cause volatility to spike.

 

We continue to emphasise that this is not the point in the cycle to chase risk. At the risk of sounding like the proverbial broken record, we will stick to the credit  analysis
and relative value  driven approach that  we have employed  effectively since inception:  taking risk  where we are  paid to do  so, positioning defensively  when risk  becomes
expensive, searching across the breadth  of public and private  fixed income markets for the  most attractive risk-adjusted returns.  Selectivity and valuation discipline  will
continue to be pivotal in 2026, with wafer-thin public credit spreads particularly vulnerable to sharp corrections from economic or geopolitical shocks.

 

For this reason we  continue to favour  rotation out of public  and into private  assets, where we see  a wider range  of opportunities and can  obtain an illiquidity  premium,
providing a more compelling case to deploy  capital, in our view. This allows us  to construct a diverse portfolio of public  and private assets designed to provide  resilience
against wider market shocks, when and where they may arise.  The portfolio has been shaped to be a net  beneficiary of any future credit spread widening and market  volatility.
While this may mean foregoing portfolio returns in the short term, in our opinion it is fundamental to driving strong performance over a longer term investment horizon.

 

MUFG Corporate Governance Limited

Company Secretary

 

21 January 2026

 

 

 

- ENDS -

 

 

The content of the Company’s web-pages and the content of  any website or pages which may be accessed through  hyperlinks on the Company’s web-pages, other than the content  of
the Update referred to above, is neither incorporated into nor forms part of the above announcement.

 

For             further             information              in             relation              to             the              Company             please              visit:
 2 https://www.mandg.com/investments/private-investor/en-gb/investing-with-mandg/investment-options/mandg-credit-income-investment-trust

 

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   ISIN:          GB00BFYYL325, GB00BFYYT831
   Category Code: MSCL
   TIDM:          MGCI
   LEI Code:      549300E9W63X1E5A3N24
   Sequence No.:  415651
   EQS News ID:   2263674


    
   End of Announcement EQS News Service

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