Paris, le 31 janvier 2008

M&G Global Basics Fund – The world is changing, so is Global Basics…Graham French & Ben Constable Maxwell

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M&G Investments - Gestion actions3 équipes complémentaires

Équipe actions internationales

Équipe actions UK

Équipe actions européennes

Soutenues par l’équipe Portfolio Stratégie & Risk

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M&G Investments - Gestion actionsÉquipe actions internationales

Asie Amérique

Value

M&G Technology Fund(Innovation)

Growth

Europe

M&G International Growth(Blue Chips)

M&G Global Basics(Changements externes)

M&G Global Leaders(Changements internes)

M&G Asia M&G American

Des fonds globaux spécialisés en terme de stylesLeurs meilleures idées déclinées dans des fonds régionaux

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M&G Global BasicsFund manager: Graham French

• 19 years at M&G

• Manager of the M&G Global Basics Fund since launch in November 2000

• Manages more than £6bn across three funds:

– M&G Global Basics Fund

– M&G Managed Growth Fund

– Vanguard Precious Metals and Mining Fund

*Source: M&G, fund sizes as at 31 December 2007

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M&G Global Basics Fund

• Inception: 17 November 2000

• Fund manager: Graham French (since launch)

• Fund size: €4,098 million

• Performance: Number one fund in sector since launch

• S&P Fund rating: AA

• Morningstar rating:

Source: Morningstar German database as at 31 December 2007, ratings and fund size as at 30 November 2007

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A dramatically changing world…

“Economic freedom has unleashed billionsof 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

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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

EnvironmentEnvironmentLifestyleLifestyle

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

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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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The potential of the emerging consumer

China has 150 cities with a populationof over 1m people… compared toEurope 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 12 times less than

in the United States

Indians drink an average of 1.5 litres of wine per year… the

French drink 60 litres

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Food & agriculture

China has 150 cities with a population of over 1m people…

compared to Europe with36 and the US with 9

Chaoda Modern Agriculture

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Lifestyle trends

Indians drink an average of 1.5 litres of wine per year… the

French drink 60 litres

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Transport & environment

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 12 times less than

in the United States

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Travel

Only 4% of the Chinese urban population has

travelled overseas

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What are we buying and selling on the fund?

Significant purchases

Source: M&G as at 31 December 2007

Constellation BrandsSantos Sherritt InternationalSymriseFraser & NeaveLindeEADS AnsellNorsk Hydro Aracruz CeluloseAmcol International Scotts Miracle GroImerysSchnitzer SteelFuturis

Significant sales

Rio TintoChevronCSRAgriumK+S Coles Impala Platinum Groupe DanoneHolcimCabot Siemens Rolls-RoyceBG 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

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Performance and portfolio analysis

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PerformanceFrench database

Number 1 fund out of 177 in sector since launch

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

M&G Global Basics Fund -2.2 10.3 23.0 23.5 131.2

FTSE World Composite Index -2.2 9.4 16.8 14.5 34.6

Equity Global sector average -4.1 0.0 10.5 9.7 -15.3

Quartile 1 1 1 1 1

Source: Morningstar, French database, Equity Global Sector, as at 31 December 2007, in euro, share A class, bid to bid net income reinvested

*since inception performance shown as cumulative

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-2-1.5

-1-0.5

00.5

11.5

22.5

3

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Book to Price Dividend Yield Earnings Yld C'Flow Yield Sales to Price

Style analysis – overall portfolio

Source: Style Research as at end December 2007

Value bias returnsStrong value bias

Std

dev

iatio

n fro

m b

ench

mar

k m

ean

Decline in value bias

An investment approach focused on company valuations

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Valuations remain the key factor

Source: CSFB HOLT, January 2008

Rio Tinto vs Sherritt International

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-5-4-3-2-101234

Book to

PriceDivid

end Yield

Earning

s Yld

C'Flow Yield

Sales to

PriceIBES Div Y

ldIBES Engs

YldIBES Sale

s Yld

Sales to

EVEBITDA to

EVRtn o

n Equi

ty

Earning

s Grow

thInc

ome/S

ales

Sales G

rowth

IBES 12Mth G

rIBES 1Y

r Rev

IBES Sales 1

2m Gr

IBES Engs LT

GIBES Sale

s LTG

Sustain

able G

rowth

Market C

apMark

et Beta

Moment

um MT

Debt/Equi

tyFore

ign Sale

s

Earning

s Gr S

tability

Sales G

r Stab

ilityLow

Accrual

s

Resources Non Resources

Source: Style Research as at end December 2007, based on a composite of the FTSE World Benchmark.

Value Growth Other

Splitting the portfolio – resources and non-resourcesS

td d

evia

tion

from

ben

chm

ark

mea

n %

A complementary balance of value and growth

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Sector breakdown

Basic materials 39.4 14.2 25.2

Healthcare 4.3 0.0 4.3

Consumer goods 22.4 21.8 0.6

Financials 0.1 0.0 0.1

Industrials 17.6 23.2 -5.6

Consumer services 3.9 11.4 -7.5

Utilities 0.4 9.3 -8.9

Oil & gas 10.3 20.0 -9.7

Cash 1.6 0.0 1.6

Sector Fund % Index % Relative %

Source: M&G Investment Management, as at 31 December 2007

Broad spread of ‘basic’ industries and companies

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Geographic split

Geographic split Portfolio %

US 31.5

France 17.2

Australia 14.9

UK 14.0

Germany 5.0

Canada 3.6

Singapore 2.6

Ireland 1.9

Austria 1.6

Norway 1.3

Other 5.0

Source: M&G Investment Management, as at 31 December 2007

Emerging market exposure through established ‘western’ companies

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Appendix

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10 largest positions

Eramet 5.0 0.0 France Nickel mining

EADS 3.5 0.1 France Aerospace & defence

Tullow Oil 3.5 0.1 UK Oil & gas

Constellation Brands 3.4 0.0 US Beverages

Lonmin 3.2 0.1 UK Platinum mining

Pilgrim's Pride 2.9 0.0 US Chicken production

Johnson Matthey 2.8 0.1 UK Platinum processing

Sims 2.7 0.0 Australia Metal recycling

Bluescope Steel 2.7 0.0 Australia Steel

FMC 2.6 0.0 US Speciality chemicals

Stock Fund % Index % Country Description

Source: M&G Investment Management, as at 31 December 2007

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-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07

Performance during H2 2007

Source: Six monthly performance of Global Basics relative to the FTSE World benchmark

Performance has been resilient during recent volatile months

Relative performance of Global Basics during H2 2007

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What areas are we avoiding in 2008?

• Japan

• Financials

• Companies with excessive leverage

• Retailers

• Chinese equities

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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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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 GroupBHP BillitonImpala PlatinumFirst Quantum MineralsRio Tinto

CVRDFalconbridgeTate & LyleAbbot GroupChevron 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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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

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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

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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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Style analysis – resources holdings

Source: Style research as at end December 2007

‘Cheap’ relative to materials sector as a whole

-6

-4

-2

0

2

4

6

Book to

PriceDivid

end Yield

Earning

s Yld

C'Flow Yield

Sales to

PriceEBITDA to

PriceRtn o

n Equi

tyEarn

ings G

rowth

Incom

e/Sale

sSale

s Grow

thIBES 12

Mth Gr

IBES 1Yr R

evMark

et Cap

Market B

etaMom

entum

STMom

entum

MTDebt

/Equity

Foreign

Sales

Low Gear

ing

Basic Material holdings versus sector average

%

Value Growth Other

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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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Company visits

G. French and M. VaightNovember 20057 company visits (South Africa, Zambia, Congo)

C. Filott & S. RhodesMay 2007, 10 company visits

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

G. FrenchNovember 2007company 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 200710 company meetings

S. Rhodes, ChinaCompany visits, Sept 2006

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

S. Rhodes & M. VaightMay 2007, 22 company visits (Canada)

G. Aldridge & M. GodfreyMarch 2007 24 company visits (Hong Kong)

G. FrenchApril 2007site 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. VaightOctober 20071 company visit

‘On the ground’ fundamental analysis

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M&G en France

Brice Anger & Olivier Sentenac

90 avenue des Champs Elysées - 75008 Paris

Tél : 01 56 43 50 76 – Fax : 01 56 43 50 83

E-mails : brice.anger@mandg.fr, olivier.sentenac@mandg.fr

www.mandg.fr

Section du site réservé aux institutionnels :

Identifiant : mandg

Mot de passe : france

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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. This prospectus, simplified prospectus, annual report and subsequent semi-annual report, are available free of charge from the ACD: M&G Securities Limited, Laurence Pountney Hill, London, EC4R 0HH, GB, or one of the following: M&G International Investments Ltd., Niederlassung Deutschland, Joachimstaler Straße 10-12, D-10719 Berlin, M&G International Investments Limited, 90 avenue des Champs Elysées, F-75008 Paris, J.P. 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