This was despite its asset management business M&G Investments recording £10.9bn in retail outflows.
M&G’s operating profit was £442m, marginally down on £446m in 2014, while its total funds under management were down 7% to £246.1bn at the end of 2015 from £264bn.
A large proportion of the outflows were from M&G’s bond funds which the company said reflected “softer consumer sentiment on fixed income assets.”
Senior analyst at Hargreaves Lansdown Laith Khalaf acknowledged that issues in the bond market broadly were a big driver of M&G’s outflows.
“Commentators have been forecasting the bond apocalypse for six years now, yet the asset class has confounded predictions, with prices driven up by falling interest rates and macro-economic worries that simply won’t go away,” he said. “However 2015 saw the first interest rate rise in the US for nine years, and some investors have clearly taken this as a sign that the end of the bull-run in bonds is nigh. Fund industry figures show significant withdrawals from fixed interest sectors since May of last year, and M&G just happens to be the biggest animal in the woods during hunting season.”
Parent company Prudential fared better with operating profit up 22% on 2014 to £4bn. The full-year ordinary dividend was raised by 5% to 38.78p per share, and a 10p special dividend will be added to that.
Mike Wells, group chief executive, said: “We have delivered a strong performance in 2015. We continue to grow across our key metrics despite the macroeconomic uncertainty and the challenges presented by low long-term interest rates. These results represent good progress towards the 2017 growth and cash objectives, which we set out at the December 2013 investor conference in London.”
“After a period of exceptional growth, M&G had a more challenging year with retail net outflows more than offsetting positive flows from institutional new business,” Wells added.
