Fixed Income  

M&G lifts curbs on Woolnough funds

M&G Investments has signalled an end to its efforts to reduce new investments into Richard Woolnough’s flagship corporate bond funds.

The group now believes the “unprecedented action” it took in 2012, after the size of the funds swelled to massive proportions, “looks like it has served its purpose”, a spokesperson told Investment Adviser last week.

He also emphasised that the funds – M&G Corporate Bond and M&G Strategic Corporate Bond – had “always been open for business” and the limits were “only ever going to be temporary”.

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In 2012, following years of bond market price rises, and thanks to their class-leading performance, the funds ballooned from £7bn at the start of 2011 to more than £12bn in November 2012 – nearing levels that could hamper performance.

That prompted M&G to ask major distributors of the funds to remove them from their ‘buy’ lists as the group appealed for investors to stop piling in.

Since then the funds have shrunk in size by roughly £2bn, not least because bond markets suffered losses in 2013 because of fears interest rate rises are now back on the table.

Broker Hargreaves Lans-down last week revealed it had added the Strategic Corporate Bond fund to its Wealth 150 list of recommended funds, having removed it in September 2012 at M&G’s request.

Hargreaves analyst Kate Marshall said the firm had “recently secured a new tranche of the fund for our clients”.