Gold prices steady amid Fed rate cut hopes; Trump-Putin talks awaited
LONDON - M&G Credit Income Investment Trust plc (LSE:MGCI) delivered a net asset value (NAV) total return of 1.59% in the second quarter of 2025, underperforming its benchmark return of 2.09%, according to a quarterly review released today.
The underperformance was primarily attributed to negative developments in two private credit investments. One credit is undergoing business restructuring due to significant changes in its target market, while the other encountered a short-term cash flow problem that required additional equity from its sponsor.
During the quarter, the investment trust increased its market capitalization by approximately £19 million through share issuance. The company deployed £12 million across nine new and existing private assets, including £4 million into the M&G European Loan Fund and £3 million to three new Regulatory Capital transactions.
The trust also allocated capital to public bonds in April following market volatility triggered by President Trump’s tariff announcements on April 2, known as "Liberation Day." These investments included additions to UK supermarket securitizations and bonds from Centreparcs and Scottish Widows.
Looking ahead, the company plans to maintain a defensive investment stance amid current market valuations. "At current valuations we will continue to keep the portfolio defensively positioned, prioritising credit quality over reaching for yield," the company stated in the press release.
The investment trust has access to a £25 million credit facility and £33 million invested in AAA/AA-rated ABS funds that can be reallocated if market volatility creates attractive investment opportunities.
Global markets experienced significant volatility during the quarter following Trump’s tariff proposals, which initially imposed a 10% baseline tariff on all imports with higher rates for products from the EU, Japan and China. However, markets largely recovered by quarter-end after a 90-day suspension of these tariffs was announced.
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