Fondskongress, March 2008

The world is changing… so is M&G Global BasicsGraham French

2

A dramatically changing world…

“Economic freedom has unleashed billions

of people to pursue the imperatives of their

nature – to work toward better lives for

themselves and their families.”

Alan Greenspan, former Chairman of the US Federal Reserve

“The Age of Turbulence - Adventures in a New World” 2007

3

M&G Global Basics Fund

Housing / urbanisationHousing / urbanisation

Economic development

Time

Basic infrastructureBasic infrastructure

Branded goodsBranded goods

Consumer goodsConsumer goods

Travel and transportTravel and transport

Raw materialsRaw materials

Food / agricultureFood / agriculture

EnvironmentEnvironment

LifestyleLifestyle

The 20-year plan - moving up the ‘Global Basics’ curve

2000

2020

2008

Identifying long-term shifts in the global economy

M&G Global Basics launched

4

The potential of the emerging consumer

China has 150 cities with a population

of over 1m people… compared to

Europe with 36 and the US with 9

Only 4% of the Chinese urban

population has travelled

overseas

Car sales in China in 2006

were 10 times those of a

decade before

Only 6% of the Indonesian

population has eaten

chocolate

Per capita energy usage in

China is one twelfth of that

in the United States

Indians drink an average of 1

litre of wine per year… the

French drink 62 litres

5

Food & agriculture

China has 150 cities with a

population of over 1m people…

compared to Europe with

36 and the US with 9

Chaoda Modern Agriculture

6

Lifestyle trends

Indians drink an average of 1

litre of wine per year… the

French drink 62 litres

7

Transport / environmental

Car sales in China in 2006

were 10 times those of a

decade before

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Energy

Per capita energy usage in

China is one twelfth of that

in the United States

9

Travel

Only 4% of the Chinese

urban population has

travelled overseas

10

Reduction in commodities based on valuations

Source: CSFB HOLT, January 2008

Rio Tinto vs Sherritt International

High returns recognised by the market Strong returns, pessimistic expectations

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What are we buying and selling on the fund?

Significant purchases

Source: M&G as at 31 December 2007

Constellation Brands

Santos

Sherritt International

Symrise

Fraser & Neave

Linde

EADS

Futuris

Ansell

Norsk Hydro

Aracruz Celulose

Amcol International

Scotts Miracle Gro

Imerys

Schnitzer Steel

Significant sales

Rio Tinto

Chevron

CSR

Agrium

K+S

Coles

Impala Platinum

Groupe Danone

Holcim

Cabot

Siemens

Rolls-Royce

BG Group

Sibir Energy

Purchases and sales in 2007

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M&A activity since launch

Economic development

Time

M&G Global Basics Fund

Activity is increasingly occurring further up the curve

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What can derail this scenario?

Money supply Circulation

At the macroeconomic level

Investment opportunities

14

What areas are we avoiding in 2008?

• Japan

• Financials

• Companies with excessive leverage

• Retailers

• Chinese equities

15

What do we expect for 2008?

• Remain upbeat on global demand

– In spite of problems such as sub-prime / credit crunch in the U.S.

• Another year of major divergence of returns for individual sectors

– Stock/sector-based investment approach should yield better results than index investing

• Continue to move away from traditional areas (e.g. Japan, US) towards areas where we see the greatest potential for the next decade

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Performance

1 year 3 years 5 years Since inception % % (pa) %(pa) %(pa)*

M&G Global Basics Fund -2.2 17.5 22.0 10.8

FTSE World Composite Index -3.9 11.5 13.6 2.7

Equity Global sector average -11.0 6.6 9.1 -4.2

Quartile 1 1 1 1

Source: Morningstar, German database, Equity Global Sector, as at 31 January 2008, in euro, share A class, net income reinvested bid to bid * Launch date 17 November 2000

Number 1 fund out of 303 global equities funds since launch

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Appendix

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Geographic split

Geographic split Portfolio %

US 31.8

Australia 17.2

France 16.2

UK 15.0

Germany 3.8

Canada 3.6

Singapore 2.4

Ireland 1.8

Austria 1.4

Hong Kong 1.3

Other 5.5

Source: M&G Investment Management, as at 31 January 2008

'Emerging’ market exposure through established ‘western’ companies

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Sector breakdown

Source: M&G Investment Management, as at 31 January 2008

Basic materials 39.7 14.5 25.2

Healthcare 4.6 0.0 4.6

Consumer goods 23.6 21.8 1.8

Financials 0.1 0.0 0.1

Industrials 17.1 23.3 -6.2

Consumer services 4.0 11.9 -7.9

Utilities 1.4 9.5 -8.1

Oil & gas 8.5 19.1 -10.6

Cash 1.0 0.0 1.0

Sector Fund % Index % Relative %

Broad spread of ‘basic’ industries and companies

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10 largest holdings

Source: M&G Investment Management, as at 31 January 2008

Eramet 5.6 0.0 France Basic materials

Tullow Oil 3.7 0.1 UK Oil & gas

Lonmin 3.5 0.1 UK Basic materials

Constellation Brands 3.3 0.0 US Consumer goods

Bluescope Steel 3.3 0.0 Australia Basic materials

Sims 3.2 0.0 Australia Industrials

Johnson Matthey 3.2 0.1 UK Basic materials

EADS 3.0 0.1 France Industrials

FMC 2.7 0.0 US Basic materials

Imerys 2.7 0.0 France Industrials

Stock Fund % Index % Country Description

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Capitalisation split

Source: M&G Investment Management, as at 31 January 2008

Capitalisation tier Fund % Index % Relative %

Mega Cap ($50bn +) 3.2 34.8 -31.6

Large Cap ($10-$50bn) 21.2 42.1 -20.9

Mid Cap ($2-$10bn) 53.4 20.3 33.1

Small Cap (<$2bn) 21.1 2.8 18.3

Cash 1.0 0.0 1.0

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A plethora of investment opportunities

Purchases Agrana Beteiligungs

Arkema

Bluescope Steel

HK & Shanghai Hotels

EADS

PZ Cussons

Coates Hire

Johnson Matthey

Yamaha Motor

Chaoda Modern Agric.

Kerry Group

Ansell

Wienerberger

VF Corp

Pilgrim’s Pride

Fraser & Neave

Constellation Brands

Symrise

Elizabeth Arden

Futuris

Sales BG Group

BHP Billiton

Impala Platinum

First Quantum Minerals

Rio Tinto

CVRD

Falconbridge

Tate & Lyle

Abbot Group

Chevron Corp

Source: M&G information

Ongoing portfolio diversification

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Returns are being transformed by external developments

Source: CSFB HOLT, January 2008

Eramet Peabody Energy

Wienerberger Yamaha Motor

Across a wide range of ‘basic’ companies

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“The world is due to consume more metals

and minerals over the next 25 years than in

the whole of its previous history”

Chip Goodyear, ex-CEO BHP Billiton

Dublin, May 2007

Demand for commodities will be a lasting

phenomenon

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Company visits

G. French and M. Vaight

November 2005

7 company visits (South Africa, Zambia, Congo)

C. Filott & S. Rhodes

May 2007, 10 company visits

C. Filott, M. Godfrey, secondment in Hong Kong and regional company visits, Nov 2006

G. French

November 2007

company visits (Australia)

Team visit, German company meetings,August 2006

M. Godfrey & M. VaightMay 200642 company visits

A. Smith, G. Aldridge, C. D’Olier& C. Filott, July 2007

10 company meetings

S. Rhodes, ChinaCompany visits, Sept 2006

G. French & M. VaightMay 200712 company meetings (Dublin)

S. Rhodes & M. Vaight

May 2007, 22 company visits (Canada)

G. Aldridge & M. Godfrey

March 2007 24 company visits (Hong Kong)

G. French

April 2007

site visits (Sri Lanka)M. Vaight, M. Godfrey & S. RhodesAugust 2007 Brazil & Mexico26 company visits

A. Smith, D. Madams Japan18 Company visits, Nov 2006

A. Smith & D. Madams, FranceSeptember 20075 company visits

M. Vaight, M. GodfreyNov 2007 Malaysia, Singapore & HK

G. French &

M. Vaight

October 2007

1 company visit

‘On the ground’ fundamental analysis

26

Lifestyle trends

• Manufactures and distributes a large portfolio of wines, beers & spirits

• Exposed to the trend of growing wine consumption in developed markets

• Sustainable business model supported by strong distribution capabilities and marketing expertise

• Good returning company in a consolidating market

Stock example – Constellation Brands

27

Consumer goods

• Japan based manufacturer and distributor of motorcycles, marine engines, boats and all-terrain vehicles

• After restructuring and consolidation of its businesses the company is now executing a strategy of profitable growth

• Held within the fund since September 2007. A classic ‘basic’ company set to benefit from the emergence of a consumer market in developing economies

Stock example – YAMAHA Motor Co

28

Branded goodsStock example – Elizabeth Arden

• Global beauty products company with a range of prestige fragrances, skin care and cosmetics brands

• Unilever sold the company in 2001 to French Fragrances who subsequently changed the name to Elizabeth Arden

• The company's strategy of growing into new markets fits the fund managers theme of companies benefiting from the emergence of consumer markets in developing countries

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• Selecting stocks on the basis of their index weighting

• Short-term trading strategies

• Changing our investment principles if they’re out of fashion

• Following market consensus

• Selecting stocks on the basis of their index weighting

• Short-term trading strategies

• Changing our investment principles if they’re out of fashion

• Following market consensus

Our core values

• Increasing the real value of our investors’ wealth over the long term

• Active, consistent, long only investment management

• Culture of integrity and original thinking

• Adding value by focusing on whatwe know

• Increasing the real value of our investors’ wealth over the long term

• Active, consistent, long only investment management

• Culture of integrity and original thinking

• Adding value by focusing on whatwe know

We believe in… We don’t believe in…

Committed to preserving our investment principles

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Ratings & awards

Source: Fund ratings and awards as at January 2008

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This financial promotion is issued by M&G Securities Limited supplied for your use only, not for onward distribution to any other person or entity. This document is designed for investment

professionals’ use only.

M&G Investment Funds (1) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC 110 and authorised by the Financial Services Authority with effect from 6 June 2001. The Fund has been certified as UCITS (Undertaking for Collective Investment in Transferable Securities) in accordance with the Counsel Directive of 20/12/85 (Directive 85/611/EEC as amended). The Fund is registered for public distribution in Germany in accordance with Sec 132 of the Investment Act, in Austria in accordance with Sec. 36 Investment Fund Act and in Luxembourg under Chapter 7, Part I of the law of 20th December 2002, as amended. In Italy the Fund is registered for public distribution under Art. 42 Legislative decree No. 58/1998. In Spain the Fund is registered for public distribution under Art. 15 of Act 35/2003 on Collective Investment Schemes, reg. no 390. The following sub-funds only are registered for sale in Switzerland: M&G American, M&G Global Basics, M&G Global Leaders, M&G European, M&G Pan European, M&G European Smaller Companies, M&G International Growth, M&G Japan Fund, M&G Japan Smaller Companies, M&G North American Value and M&G Asian. The Fund in registered for public distribution in France pursuant to an authorisation granted by the AMF on 4 September 2007. M&G Investment Funds (2) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC000116 and authorised by the Financial Services Authority with effect from 1 August 2001. The Fund has been certified as UCITS (Undertaking for Collective Investment in Transferable Securities) in accordance with the Counsel Directive of 20/12/85 (Directive 85/611/EEC as amended). The Fund is registered for public distribution in Luxembourg under Chapter 7, Part I of the law of 20th December 2002, as amended. The following sub-fund only is registered for sale in Switzerland: M&G UK Growth.M&G Investment Funds (3) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC000117 and authorised by the Financial Services Authority with effect from 8 August 2001. The Fund is an open-ended fund under English law and has been certified as UCITS (Undertaking for the Collective Investment in Transferable Securities) in accordance with the Counsel Directive of 20 December 1985 (Directive 85/611/EEC, as amended). The Fund is registered for public distribution in Germany in accordance with Sec132 of the Investment Act, in Austria in accordance with Sec. 36 Investment Fund Act, and in Luxembourg under Chapter 7, Part I of the law of 20th December 2002, as amended. .In Italy the Fund is registered for public distribution under Art. 42 Legislative decree No. 58/1998. In Spain the Fund is registered for public distribution under Art. 15 of Act 35/2003 on Collective Investment Schemes, reg. no 391. The following sub-fund only is registered for sale in Switzerland: M&G Recovery. The Fund in registered for public distribution in France pursuant to an authorisation granted by the AMF on 4 September 2007.M&G Investment Funds (6) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC 490 and authorised by the Financial Services Authority with effect from17 November 2006. The Fund has been certified as UCITS (Undertaking for Collective Investment in Transferable Securities) in accordance with the Counsel Directive of 20/12/85 (Directive 85/611/EEC). The Fund is registered for public distribution in Germany in accordance with Sec 132 of the Investment Act, in Austria in accordance with Sec. 36 Investment Fund Act and in Luxembourg under Chapter 7, Part I of the law of 20th December 2002, as amended. .In Italy the Fund is registered for public distribution under Art. 42 Legislative decree No. 58/1998. In Spain the Fund is registered for public distribution under Art. 15 of Act 35/2003 on Collective Investment Schemes, reg. no 490. The following sub-fund only is registered for sale in Switzerland: M&G Optimal Income. The Fund in registered for public distribution in France pursuant to an authorisation granted by the AMF on 11 September 2007.M&G Investment Funds (7) is an open-ended investment company with variable capital, incorporated in England and Wales under registered number IC000552 and authorised by the Financial Services Authority with effect from 3 July 2007. The Fund has been certified as UCITS (Undertaking for Collective Investment in Transferable Securities) in accordance with the Counsel Directive of 20/12/85 (Directive 85/611/EEC as amended). The Fund is registered for public distribution in Luxembourg under Chapter 7, Part I of the law of 20th December 2002, as amended. In Italy the Fund is registered for public distribution under Art. 42 Legislative decree No. 58/1998. The Fund is registered for public distribution in France pursuant to an authorisation granted by the AMF on 4 September 2007.Neither the Authorised Corporate Director (ACD) nor the single sub-funds are subject to the supervision of a German, Austrian, Italian, Swiss, Luxembourg, French or Spanish supervisory authority.This information is not an offer or solicitation of an offer for the purchase of investment shares in one of the Funds referred to herein. Purchases of a Fund should be based on the current prospectus. 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