M&G retail outflows rise to £3.4bn

M&G recorded £3.4bn in retail net outflows for the first half of 2015, Prudential reported on Tuesday, driven principally by redemptions from its bond funds.

M&G retail outflows rise to £3.4bn

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The shift in investor sentiment away from fixed income that is behind the increase in retail outflows is expected to continue into the second half of the year, the firm added. The outflows also more than offset the net inflows seen into multi-asset funds during the period.

In the second quarter of the year, M&G saw £4bn in net retail outflows, which included £2.6bn from Europe.

While the net figure was negative, the firm also reported a 6% increase in total gross retail and institutional inflows to £20.4bn. As a result,, it said, total retail funds under management by end June fell to £69.2bn from £71.9bn for the comparable period in 2014.

According to data from FE Analytics, of the 20 funds most shedding money in the three months to end July, seven belong to M&G, including the number one, three and four positions. Of that list, the M&G Optimal Income fund is the clear leader, shedding £2.5bn in AUM, more than double second placed Newton Asian Income, which has lost £1.1bn over the same period.

The M&G Global Dividend and M&G North American Dividend funds lost £858,000 and £468,000 respectively, FE Analytics data shows.

On the institutional side of the M&G business, Prudential’s first half results show that net inflows increased to £1.0bn from £400,000 in the 2014 period.

“The M&G Alpha Opportunities Fund has been particularly popular, attracting net inflows of £1.3bn,” the firm said, while adding that external institutional funds under management rose 6% to £64.2bn.

Despite the outflows, the asset manager reported a 11% increase in IFRS operating profit to £251m, reflecting, Prudential said, “growth in average assets under management between the two periods and effective cost control”.

“The higher level of earnings enabled M&G to remit £151m to the group in the first half of 2015, representing a 12% increase on the prior period,” it said.

Prudential reported a 17% increase in group IFRS operating profit to £1.8bn 

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