M&G Global Dividend Fund

April 2012

Simon Bailey, Deputy Fund Manager

2

• Inception: July 2008

• Fund manager: Stuart Rhodes

• Fund size: € 3,262 million

• Benchmark: MSCI AC World Index

• Yield objective: Yield premium to the global average

• Performance objective: Total return (income and capital growth)in excess of the MSCI AC World Index

M&G Global Dividend FundFund facts

Source: M&G, as at 31 March 2012. Ratings as at 29 February 2012 and should not be taken as recommendation

3

M&G Global Dividend FundPerformance since launch

M&G Global Dividend Fund

MSCI AC World Index

Since Launch(18.07.08) %

Quartile ranking in Morningstar Global Large-Cap Value Equity sector

Global Large-Cap Value Equity sector average

3 years%

6 months%

14.1

1

46.4

27.5

60.9

1

109.4

78.3

17.2

1

21.2

21.1

Source: M&G, Morningstar as at 31 March 2012. Euro A class shares (Pan European database), bid to bid, net income reinvested.

1 year%

3.3

1

11.4

6.4

4

Agenda

• Dividend investing – our philosophy

• Investment process

• Fund update

5

Dividend investing – our philosophy

Source: M&G as at 31 December 2011

Div

iden

d (p

)

The power of long-term compounding

Div

iden

d (p

)

0

5

10

15

20

25

30

Dividend (stock yielding 6%, no growth) Dividend (stock yielding 4%, 10% growth)

Focus on dividend growth

6

• Long-term dividend growth requires disciplined growth in the business

• Rising dividends create cultureof discipline

• Dividends shouldn’t be an afterthought

– An integral part of good company management

Dividend investing – our philosophy

Source: Mergent’s Dividend Achievers, as at 29 February 2012

USdividend achievers

Capital discipline

7

Ret

urn

(%)

10

33

86

141

0

20

40

60

80

100

120

140

160

S&P500 CapitalReturn

S&P500 Total Return Dividend AchieversCapital Return

Dividend AchieversTotal Return

Dividend investing – our philosophy

Source: Mergent’s Dividend Achievers, as at 30 November 2011; Datastream as at 31 December 2011. US companies with a 25-year track record of consecutive dividend growth

Capital growth vs. total return: US returns over 10 years to December 2011

Dividends and growth are not mutually exclusive

Dividends and share prices go hand in hand

8

Agenda

• Dividend investing – our philosophy

• Investment process

• Fund update

9

Investment processEfficiency, discipline and conviction

Identifying stocks we would like to own at

some point

• Long-term dividend track record

• Long-term growth prospects

Investableuniverse

200 stocks

Screening

Eliminating stocks from the global universe of

15,000 stocks

• Focus on dividend-paying companies

• Focus on stocks with sufficient liquidity (market cap >$1 billion)

4,000 stocks

Portfolio construction

Constructing a portfolio that can outperform in all market conditions

• Picking stocks from three sources dividends

• Position size determined by conviction

Final portfolio50 stocks

10

-50

-40

-30

-20

-10

0

10

20

MSCI AC World MSCI World High Dividend Yield

Investment processRe

turn

(%)

Source: Bloomberg as 31 December 2011

Annual return (EUR): MSCI World High Dividend Yield Index vs. MSCI AC World Index

Understanding potential headwinds

High yield strategies tend to outperform in falling markets

11

Investment process

-10-505

101520253035404550

MSCI AC World MSCI World High Dividend Yield

Retu

rn (%

)

Source: Bloomberg as 31 March 2012

Annual return (EUR): MSCI World High Dividend Yield Index vs. MSCI AC World Index

Understanding potential headwinds

High yield strategies struggle to keep up in rising markets

12

Investment process

The importance of having a balance

Structural growth driven by geography or product line

Asset-backed cyclical companies

Disciplined companies with reliable growthQuality

Company characteristicsSources ofdividends

10 – 20%

20 – 30%

50 – 60%

Typical fundweighting

Assets

Rapid growth

Portfolio construction: mitigating our weaknesses

13

Investment process

Source: M&G, as at 31 March 2012

Fund

wei

ghtin

g (%

)Three sources of dividends

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Quality

Assets

Rapid growth

Sale at right price

Cash

14

Investment processDividend cuts will happen

Source: M&G, as at 31 March 2012

Evidence that the fund is taking enough risk

129

20

0

20

40

60

80

100

120

140

Dividend Increases Dividend Cuts

Num

ber o

f div

iden

d an

noun

cem

ents

Number of dividend increases/cuts since fund launch (18.07.08)

15

0

10

20

30

40

50

60

70

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Mar-0

9

May-

09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar-1

0

May-

10

Jul-1

0

Sep-

10

Nov-

10

Jan-

11

Investment process

Source: Datastream, as at 28 February 2011

Shar

e pr

ice

(CA

D)

Purchased at fund launch:

yield 2.5%

Dividendcut

Acquisition of Fording Canadian

Coal TrustAdding to holding

below CAD 10

Dividendreinstated

Holding sold on valuation

grounds

Dividend cuts are NOT an automatic sell signal

16

Investment processDon’t sell on the news

Source: Bloomberg, as at 31 March 2012

59.2%

31.6%

0%

10%

20%

30%

40%

50%

60%

70%

Fund holdings (ex Teck) MSCI AC World

Returns since dividend cut (EUR)

Sell at the right price – valuation is key

17

17.0%

26.0%22.0%

28.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008* 2009 2010 2011

Investment process

A 50 stock portfolio with one or two stocks entering and leaving the fund each month Source: M&G, as at 31 December 2011. * Fund launched 18 July 2008

A long-term investment approach

18

Agenda

• Dividend investing – our philosophy

• Investment process

• Fund update

19

M&G Global Dividend Fund

US & Canada

Europe

UK

Asia ex Japan

AustraliaBrazil Cash

Region %

US & Canada 43.3

Europe 22.5

UK 14.3

Asia ex Japan 9.0

Australia 6.2

Brazil 2.4

Cash 2.3

Source: M&G, as at 31 March 2012

Geographic diversity

Structurally underweight in Japan

20

0

10

20

30

40

Global size Currency Region Global market (Beta) Sector Stock specific

Currency risk

M&G Global Dividend Fund: contribution to active risk

%

Source: Bespoke risk model relative to MSCI AC World Index as at 31 December 2011.

Minimal contribution to portfolio risk

21

Consumer staples 15.8 10.2 5.6

Financials 24.9 19.5 5.4

Materials 11.9 7.9 4.0

Healthcare 8.6 8.9 -0.3

Utilities 2.6 3.7 -1.1

Energy 9.5 11.4 -1.9

Information technology 10.1 13.1 -3.0

Telecommunication services 0.8 4.5 -3.7

Industrials 6.8 10.5 -3.7

Consumer discretionary 6.7 10.5 -3.8

Cash 2.3 0.0 2.3

MSCI AC WorldIndex (%)

Fund (%)

M&G Global Dividend Fund

Sector

Source: M&G, as at 31 March 2012

Relative (%)

Sector breakdown

22

M&G Global Dividend FundMarket cap split

Source: M&G, as at 31 March 2012

Company size Fund (%) MSCI AC World (%)

Mega cap ($50bn +) 30.7 36.7

Large cap ($10-$50bn) 44.1 39.2

Mid cap ($2-$10bn) 19.0 21.7

Small cap (<$2bn) 3.8 2.4

Cash 2.3 0.0

23

-25-20-15-10-505

10152025303540

MSCI AC World M&G Global Dividend Fund

M&G Global Dividend FundRe

turn

(%)

Source: Bloomberg as at 31 December 2011. Euro A class shares, bid to bid, net income reinvested. *Fund launched on 18 July 2008

M&G Global Dividend Fund: calendar year returns (EUR)

Outperforming in different market conditions

24

M&G Global Dividend Fund

Global average 3.1%

M&G Global Dividend Fund 3.8%

Source: Portfolio yield calculated by M&G using dividend forecasts to March 2012 as at 31March 2012. Global yield data from Societe Generale as at 2 April 2012.

Portfolio yield and dividend growth (prospective)

Yield Dividend growth

8%

8%

25

M&G Global Dividend FundThe power of long-term compounding

-30

-20

-10

0

10

20

30

40

2009/2010 2010/2011 2011/2012

Ret

urn

(%)

Dividend growth since launch

USJapanEuropeUK

M&G Global Dividend Fund

+9%

+13%

+9%

Source: M&G, as at 31 March 2012. Sterling A class shares. Historic US data from Standard & Poor’s, historic UK data from Capita Registrars; all other data from Societe Generale

26

Summary

• Focus on dividend growth, not yield

• Creating a balanced portfolio to outperform in different market conditions

• Dividend investing is an excellent way to build wealth

27

Appendix

28

Dividend Growers & Initiators ( )

Non Dividend-Paying Stocks ( )

S&P 500 Geometric Equal-Weighted Total Return Index ( )

10,000

1000

100

10

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2010

2002

2004

2006

2008

The power of dividends

Returns of S&P 500 stocks by dividend policy

Returns based on monthly equal-weighted geometric average of total returns of S&P 500 component stocks, with components reconstituted monthly.

A winning strategy

Copyright 2011 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. . www.ndr.com/vendorinfo/ . For data vendor disclaimers refer to www.ndr.com/copyright.htmlSee NDR Disclaimer at

Monthly Data 31/1/1972 – 31/12/2011 (Log Scale)

5000

500

50

Dividends and share-price performance go hand in hand

2011

29

Share buybacks

Source: S&P 500 data from Bloomberg as at 31 December 2010, buyback data from Standard & Poor’s as at 23 March 2011

800

1000

1200

1400

1600

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

100

200

300

400

500

600

700

S&P 500 (Index level) Buybacks ($ billion)

S&P

500

Buybacks ($ billion)

Not the same as dividends

Cyclical by nature: buying shares at high prices is asource of huge value destruction

30

What are we looking for?Discipline and growth

Does the company invest capital wisely?

Can the company grow in a sustainable manner over time?

What yield can we get for this type of company?

Does the company have a long track record of dividend growth?

31

M&G Global Dividend Fund

Source: M&G, as at 31 March 2012.

Transactions over the past 12 months

New purchases

Quality

Svenska Handelsbanken

Intact Financial

Mattel

British American Tobacco

Assets

Blackrock

Occidental Petroleum

Siemens

CNOOC

Umicore

Prosafe

Rapid growth

Tod’s

CME Group

Campbell Brothers

Analog Devices

Chroma ATE

32

Umicore

Source: Bloomberg as at 31 December 2011

Assets

• World leader in materials technology based in Belgium

• Cyclical businesses with long-term growth in underlying markets

– Automotive catalysts

– Rechargeable batteries

– Precious metals recycling

• Consistent dividend history

– 2011 dividend increased by 25%

Dividend (€)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

33

MattelQuality

• World’s leading toy company

– Strong brands

– Global footprint

• Long track record of profitable growth

– Innovation

– International expansion

• Commitment to shareholder returns

– 35% increase in 2012 dividend

Source: Mattel analyst presentation, 11 February 2011

34

M&G Global Dividend Fund

Source: M&G, as at 31 March 2012. *Spun off from ITT, **Spun from Foster’s Group

Complete sales

Transactions over the past 12 months

Quality

VF Corp

AES Tiete

Coca-Cola

Total

Foster’s Group

Souza Cruz

Assets

Rolls Royce

Diamond Offshore

Timken

Rapid growth

ITT

Johnson Matthey

Esprit

Cremer

Sale at right price

Xylem*

Bluescope Steel

Exelis*

Treasury Wine Estates**

Esprit

35

US & Canada 43.3 50.5 -6.2

Europe 22.5 15.7 6.8

UK 14.3 8.2 6.1

Japan 0.0 7.9 -7.9

Asia ex Japan 9.0 9.3 -0.3

Australia/NZ 6.2 3.1 3.1

Latin America 2.4 3.0 -0.6

EMEA 0.0 2.3 -2.3

Cash 2.3 0.0 2.3

MSCI AC WorldIndex (%)

Fund (%)

M&G Global Dividend Fund

Sector

Source: M&G, as at 31 March 2012

Regional breakdown

Relative (%)

36

M&G Global Dividend FundFu

nd w

eigh

ting

(%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%US & Canada

Continental Europe

UK

Japan

Asia ex Japan

Australia

Latin America

EMEA

Cash

Geographic split

Source: M&G, as at 31 March 2012

37

M&G Global Dividend FundTop 10 holdings

Stock Fund (%)

Source: M&G, as at 31 March 2012

Chubb US 3.3

Methanex Canada 3.2

Novartis Switzerland 3.2

Prudential UK 3.2

Intel US 2.9

DSM Netherlands 2.8

HSBC Hong Kong 2.8

Reynolds American US 2.8

British American Tobacco UK 2.8

Analog Devices US 2.7

Country

38

Liquidity

A scalable investment process

Source: M&G, as at 12 December 2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

£10m+ £2m - 10m <£2m

Portfolio split by average daily volume

39

Sell disciplineTough competition for places in the portfolio

Better options Return % Disasters Return %Valuation Return %

Source: M&G, as at 31 January 2012. Returns relative to FTSE World Index.

3M 44.5Home Depot 42.4Astellas Pharma 39.5CNOOC 62.4Cochlear 61.3Massmart 65.2Souza Cruz 82.5Rolls Royce 89.9Johnson Matthey 44.1Coca-Cola 69.3

Carnival 11.4ING -15.8Credit Suisse 23.5BASF -17.5Teliasonera -1.0Pfizer 16.6Wells Fargo 18.9Philips Electronics -11.6Petrobras 44.3Tele2 5.8Tate & Lyle 6.4Holcim 32.3US Bancorp 10.6Billabong 21.8DuPont 7.2Microsoft 4.2Alliant Energy 6.8Vale 25.2America Movil 14.7Wellstream 32.1Corn Products 5.7Statoil -15.5Kellogg 14.4Teck 49.9Cremer -1.7Timken 116.7Foster’s Group 47.4Total -15.4Diamond Offshore -12.5

Aracruz -70.1Norsk Hydro -41.7E.ON -37.9Esprit -68.1Bluescope Steel -105.4

40

M&G Global Dividend Fund

Value added by stock relative to MSCI AC World Index (18.07.08 – 31.12.11)

Source: Xamin, as at 31 December 2011. Investment returns (gross of fees) relative to MSCI AC World, calculated in sterling

Diversified sources of performance

Returns driven by the investment approach, not just ahandful of names

-3

-2

-1

0

1

2

3

4

5

6

Cont

ribut

ion

to re

lative

per

form

ance

41

Attribution by source of dividends

0

5

10

15

Quality Assets Rapid Growth

Valu

e ad

ded

(%)

Attribution by source of dividends since fund launch (18.07.08)

Source: Xamin, as at 31 December 2011. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling

Diversified sources of performance

42

M&G Global Dividend Fund

Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.

Bottom 10

Performance attribution by stock (One year to 31 March 2012)

Top 10

BHP Billiton -0.51

Banco Do Brasil -0.49

Bluescope Steel -0.48

HSBC -0.38

Telefonica -0.38

Yip’s Chemicals -0.34

Axa -0.33

Chroma ATE -0.21

ITT Corp -0.19

Diamond Offshore -0.17

VF Corp 0.88

Intel 0.76

Roche 0.65

Reynolds American 0.63

Chubb 0.51

Prosafe 0.47

Arthur J Gallagher 0.42

Taiwan Semiconductor 0.40

Methanex 0.38

Foster’s Group 0.36

Value added (%)

Value added (%)

43

M&G Global Dividend Fund

%

Performance attribution by region (One year to 31 March 2012)

-2

-1

0

1

2

3

4US

/ Can

ada

Euro

pe ex

UK UK

Japa

n

Asia

ex Ja

pan

Aust

ralia

/ NZ

Latin

Am

erica

EMEA

Stock selection Asset allocation

Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.

44

M&G Global Dividend Fund

%

Performance attribution by sector (One year to 31 March 2012)

-1

0

1

2

3

Tech

nolo

gy

Fina

ncial

s

Utilit

ies

Telec

omm

unica

tion

serv

ices

Cons

umer

disc

retio

nary

Healt

hcar

e

Cons

umer

stap

les

Indu

stria

ls

Mate

rials

Ener

gy

Stock selection Asset allocation

Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.

45

M&G Global Dividend FundComprehensive support infrastructure for fund managers

7 PCR team members (Equities)

9 Investment Specialists (Equities)

M&G Equities Investment Team

M&G Global Equities Team22 investment professionals

Equity Research

Investment Specialists

Fund Manager Assistants (FMAs)

6 FMAs (Equities)

Equities Dealing Team

Portfolio Construction& Risk

Head of Equity Research:

James Alexander

11 Analysts

Head of Dealing: Daniel Riches

5 Dealers

M&G Global DividendFund Manager: Stuart Rhodes

Deputy Fund Managers: Simon Bailey, Aled Smith

M&G Global DividendKotaro Miyata

Susanne Grabinger

M&G Global DividendJames Doogan

Adam Jones

Source: M&G as at 23 January 2012.

M&G Global DividendMaria AsprouliRitu Vohora

Dave FishwickHead of Macro and Equity Investment

David McGillverayHead of

InvestmentOversight

Gary CottonChief Executive

- Equities

Arvind SabharwalDirector of Investment

- Equities

Prices may fluctuate and you may not get back your original investment.This document is designed for investment professionals’ use only, not for onward distribution to any other person or entity. For Switzerland: Distribution of this document inor from Switzerland is not permissible with the exception of the distribution to qualified investors according to the Swiss Collective Investment Schemes Act, the SwissCollective Investment Schemes Ordinance and the respective Circular issued by the Swiss supervisory authority ("Qualified Investors"). Supplied for the use by the initialrecipient (provided it is a Qualified Investor) only. In Spain the M&G Investment Funds are registered for public distribution under Art. 15 of Act 35/2003 on Collective InvestmentSchemes as follows: M&G Investment Funds (1) reg. no 390, M&G Investment Funds (2) reg. no 601, M&G Investment Funds (3) reg. no 391, M&G Investment Funds (5) reg. no 972,M&G Investment Funds (7) reg. no 541, M&G Investment Funds (9) reg. no 930, M&G Global Dividend Fund reg. no 713 M&G Dynamic Allocation Fund reg. no 843, M&G Global MacroBond Fund reg. no 1056 and M&G Optimal Income Fund reg. no 522. The collective investment schemes referred to in this document (the "Schemes") are open-ended investmentcompanies with variable capital, incorporated in England and Wales. In the Netherlands, all funds referred to, with the exception of M&G Investment Funds (2), M&G Investment Funds(5), M&G Investment Funds (9) and the M&G Dynamic Allocation Fund, are registered with the Dutch regulator, the AFM. This information is not an offer or solicitation of an offer for thepurchase of investment shares in one of the Funds referred to herein. Purchases of a Fund should be based on the current prospectus. The prospectus, Key Investor InformationDocument (KIID), annual report and subsequent semi-annual report, are available free of charge, in paper form, from the ACD: M&G Securities Limited, Laurence Pountney Hill, London,EC4R 0HH, GB, or one of the following: M&G International Investments Limited, German branch, Bleidenstraße 6-10, D-60311 Frankfurt am Main, the German paying agent J.P. MorganAG, Junghofstraße 14, D-60311 Frankfurt am Main, the Austrian paying agent, Raiffeisen Bank International A.G., Am Stadtpark 9, A-1030 Wien, the Luxembourg paying agent, J.P.Morgan Bank Luxembourg S.A., European Bank & Business Center, 6 c route de Treves, 2633 Senningerberg, Luxembourg, Allfunds Bank, Calle Estafeta, No 6 Complejo Plaza de laFuente, La Moraleja 28109, Alcobendas, Madrid, M&G International Investments Limited, 34 Avenue Matignon, 75008, Paris, France or from the French centralising agent of the Fund:RBC Dexia Investors Services Bank France. For Switzerland: Please refer to M&G International Investments Ltd., Bleidenstraße 6-10, D-60311 Frankfurt am Main or, for Sweden, fromthe paying agent, Skandinaviska Enskilda Banken AB (publ), Sergels Torg 2, 106 40 Stockholm, Sweden. For Italy, they can also be obtained from one of the appointed paying agents,details of which can be found by visiting the contact section on the following website: www.mandg-investments.it. Before subscribing you should read the prospectus, which includesinvestment risks relating to these funds. This financial promotion is published by M&G International Investments Ltd. Registered Office: Laurence Pountney Hill, London EC4R 0HH,authorised and regulated by the Financial Services Authority and registered with the CNMV in Spain. Past performance is not a guide to future performance. Performance stats arequoted gross of Italian tax on capital gains