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M&G to cut fees across a range of funds

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15/01/2021
M&G will cut charges across a number of funds next month, “making a material difference to a lot of investors”.

The investment giant confirmed that from 15 February, a range of M&G funds will see a reduction in the annual charge “as part of its commitment to provide ongoing value for money”.

The actual charge investors will pay depends on the fund and share class as the reduction isn’t the same across its range. M&G said this is because its pricing review meant that the reduction for some funds should be higher, while others were already offering better value.

M&G said that currently share classes in 45 of its mutual funds will see a reduction in price. Further, direct customers who invest in either the A, R or X share class will see a minimum reduction of 10 basis points and up to a 35 basis point reduction in some instances. The changes apply to direct and intermediary customers, such as those investing via a platform, though these are more likely to hold I share classes.

You can see the full details of the price changes via this M&G fund link.

A spokesperson said: “We are continuously seeking ways to offer better value to our customers and we have started writing to customers invested in our UK range who will see a reduction in their charges, effective 15 February 2021.

“This reduction builds on other initiatives we introduced in recent years. For example, we abolished entry and exit charges for good, simplified and made our charges more predictable and introduced economies of scale discounts for the benefit of those investors in our larger funds (over £1 billion in size).”

Darius McDermott, managing director of Chelsea Financial Services, said: “The reduction in the annual management charges on a range of M&G funds is great news for investors – especially as their OCF equals their AMC – no other charges are added.

“From 15 February 2021, the cost of investing in most of M&G’s funds will be reduced, including its biggest and most popular offerings. Some, like M&G Optimal Income, will see charges cut by up to 0.25%.

“When you think that M&G’s 10 biggest funds have more than £20bn of assets between them, this will make a material difference to a lot of investors and make the funds much better value for money.

“M&G is the first big fund management company to make such substantial cuts and I’d hope this prompts others to do the same.”

M&G Property Portfolio

The M&G Property Portfolio was suspended in December 2019, meaning investors have been unable to access their cash for over a year.

During this time it has been waiving 30% of the annual charge “in recognition of the inconvenience caused to clients and customers.”

M&G added today that the annual charge will only contain costs of running the fund. Expenses related to managing the properties within the fund will be disclosed separately. This will not change the overall amount paid to invest in the fund, but it will help investors compare the costs more easily with other property funds.

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