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Home > Investments > UK

Pru to merge away underperforming Newton funds

Prudential to merge three unit trusts, including two run by BNY Mellon subsidiary Newton, into M&G Investments funds.

By Rebecca Clancy | Published May 01, 2012 | comments

Prudential has proposed the merger of three of its funds into existing M&G vehicles, including one run by Graham French.

The proposed merger will see two underperforming funds currently run by BNY Mellon subsidiary Newton Investment Management bought in-house.

It is proposed that the underperforming £62.3m Prudential (Newton) Higher Income unit trust, currently managed by Tineke Frikkee, will merge in to Alex Odd’s £1.3bn M&G Dividend fund.

The Prudential (Newton) vehicle has delivered a third quartile loss of 5.25 per cent over five years compared with the IMA UK Equity Income sector average loss of 1.8 per cent, according to Morningstar.

The £163.9m Prudential (Newton) Managed trust, managed by Newton’s Nick Clay, will merge into Graham French’s £1.2bn Managed Growth fund.

This vehicle has delivered third quartile gains of 2.7 per cent over five years compared with the IMA Flexible Investment sector average of 4.1 per cent, according to Morningstar.

Meanwhile, the £417.4m Prudential Pacific Markets trust, managed by Andrew Cormie, will merge into the £503.1m M&G Asian fund, managed by Michael Godfrey and Matthew Vaight.

The mergers are subject to unitholder approval and if approved the changes will take place on June 22.

An M&G spokesperson said Prudential Unit Trusts Limited (PUTL) regularly reviewed its fund and product ranges with the objective of providing investors with a superior long-term investment performance.

This is the latest round of mergers from PUTL, which has so far merged 14 Prudential funds in to M&G vehicles.

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