Quarterly Review

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:

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

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