M&G Investments has been forced to adjust the payout from its High Yield Corporate Bond fund for the second time this year following an error regarding tax payments.
The company has had to cut the December income payments from the fund’s A, X, R and I income-paying share classes by between 9 per cent and 13 per cent after fund administrators State Street discovered an error in tax calculations.
Tax which should have been deducted in August and November payments is now being taken from December distributions instead.
It follows a separate incident on the same fund earlier this year when the cash from a maturing bond in the portfolio was incorrectly attributed to share classes, meaning income investors were overpaid in May. Payouts in July were adjusted accordingly.
In a notice posted on its website yesterday, M&G apologised for the latest error and said the total return of the fund for the year would be unaffected.
“The error was identified through existing administrative controls,” the company said. “To prevent this type of error from re-occurring we have increased the frequency at which these controls are operated.”
A spokesperson for the company added: “We apologise for any inconvenience this may cause and have also written to all affected investors to explain why the December distribution may be a bit lower than expected.
“We have acted as swiftly as possible to rectify the administrative error, in accordance with the FCA regulatory rules.”
The fund is managed by Stefan Isaacs and has gained 6.2 per cent in 2013 to December 18, according to FE Analytics, marginally underperforming the IMA Sterling High Yield sector’s average return of 6.7 per cent.