Of the £2.9bn in fund flows, just £0.1bn was institutional monies as a result of significant outflows, the group says. "As expected, a number of segregated clients withdrew money from public debt funds due to asset allocation decisions. However, fee rates on some of the inflows are higher than on the outflows," the Pru reports.
Retail fund flows, while strong at £2.8bn, represent a 17% drop from this time last year. Within this area bonds made up the majority of sales, accounting for 62%. This represents a significant shift in investor attitudes, the Prudential notes, pointing out that in the last quarter of 2010, equity funds at the group accounted for 70% of fund flows.
“One of M&G’s flagship investment funds, the M&G Optimal Income Fund, has proved especially popular over the first half of the year. Despite a general shift away from equity-based investments, M&G’s key equity funds such as M&G Global Basics, M&G Recovery and M&G Global Dividend, have continued to enjoy healthy levels of net inflows.”
So far this year Optimal Income has attracted £0.7bn.
The Prudential says the overall slowdown compared to last year’s figures was not unexpected considering the group had seen two years of record fund flows. It also points out that M&G is ranked first in terms of net sales in the UK retail market for the past 10 consecutive quarters to 31 March, according to the Fundscape Pridham report.
M&G’s overseas business aided the group as it continued to make strides distributing in Europe. M&G’s European business was responsible for 32% of its net flows so far this year.
Equity market levels have boosted business results with M&G’s total funds under management at 30 June 2011 standing at a record level of £203bn, up 14% on the same point in 2010. External funds under management, also at record levels, are £93.4bn, 23% higher than the end of June 2010.
