M&G reviews fees as it admits Recovery fund is ‘poor value’

Manager of the fund Michael Oliveros said the shares of smaller companies were “inherently more volatile” than their larger counterparts and that he still saw “great long-term potential” for the investors in the fund.

M&G said it had determined that “fresh action” was needed in regards to both the Recovery and Pan European Smaller Companies funds and that it would update investors as soon as it was appropriate.

The fund house found its Property Portfolio had also failed to deliver value, primarily due to a wave of redemptions resulting in the fund being suspended in December 2019 over liquidity concerns. The fund’s performance was also rated as “must improve”.

M&G rated its other funds as either satisfactory, good or outstanding, concluding they had delivered value to most of their investors over the review period.

Why M&G assessed its value for money

As part of the Financial Conduct Authority’s asset management review, fund houses are now required to carry out an annual assessment of whether the firm provides value for their clients.

The value rules — which have been in effect since the start of 2020 — require asset managers to look at their performance, costs, economies of scale, comparable market rates, services and share classes.

The mandated reports have already triggered Artemis and Aviva Investors to make changes to their fund ranges and charges.

Others, such as Vanguard and Hargreaves Lansdown, have insisted their funds deliver good value.


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