The firm said the effect would enable Lord to invest in the full range of assets currently allowed under the investment policy.
This would in turn enable a greater level of diversification and remove the obligation to invest a large proportion of the fund in money market instruments – which have seen significant redemptions this year.
Lord has run the fund since 2009 and has underperformed the sector average throughout his tenure, although he has made positive returns in each single year (2.2% in 2011/12, 0.5% in 2010/11 and 3% in 2009/10, as at the end of August).
His investment policy says he invests mainly in debt instruments that include but are not limited to variable rate securities, fixed interest securities gilts and corporate debt.
M&G said the fund’s objective to "provide income with stability of capital" will remain unchanged and the overall risk profile will not be affected.
It will remain in the IMA £ Corporate Bond Sector alongside Richard Woolnough’s £5.6bn M&G Strategic Corporate Bond Fund, which has significantly outperformed the sector over the past five years.
Lord also runs the M&G UK Inflation Linked Corporate Bond Fund and M&G European Inflation Linked Corporate Bond Fund.