M&G bumps incumbent manager from £1.1bn UK equity income fund

M&G Investments has bumped incumbent manager Phil Cliff (pictured) from the £1.1bn UK equity income fund in a bid to breathe new life into the fund after a period of lacklustre performance.

Cliff will be replaced as the primary manager on the M&G Dividend fund by Michael Stiasny effective immediately, the asset manager said.

Cliff will continue to oversee the M&G Pan European Dividend and the M&G European Select funds, with the firm noting his two decades of experience in pan-European investments.

‘Fresh approach’

M&G said Stiasny will shake up the 55-year-old fund by bringing “a fresh approach” which includes focusing on higher yield, similar to that of the £1.1bn M&G Charifund strategy he currently runs. He will also look to gradually increase the holdings in the portfolio to diversify the sources of income but M&G has stressed there will be no change to the fund’s aims, objective or policy.

Stiasny is deputy manager on the £2.3bn Recovery fund and manager of the £581m UK Income Distribution fund, which he joined last year.

M&G Dividend has struggled to outperform peers in the IA UK Equity Income sector, landing in the fourth quartile over three and five years. Since Cliff took over as lead manager in July 2013 the fund has returned 33.51%, worse than the sector’s 42.28%.

Over the last six to 12 months the fund has lost money for investors. But performance has picked up on a three-month view, with the fund returning 2% compared with the average sector return of 1.4%.

Source: Trustnet

M&G head of equities Anton Oliver said during his time as a fund manager, Stiasny has “demonstrated strong strategic and stock selection skills”.

“Michael’s stewardship of the Charifund has grown the income distributions to charities year-on-year, allowing them to maintain the important work they do throughout the country. He can now emulate this investment approach for a broader range of our customers.”