M&G to merge away M&G European Corporate Bond Fund

20 April 2023

M&G today announces its intention to merge the £37 million M&G European Corporate Bond Fund (“the Merging Fund”) into the M&G Strategic Corporate Bond Fund “the Receiving Fund”.

There has been a reduction in appetite for European corporate bond strategies in the UK and with outflows having accelerated in recent years, the M&G European Corporate Bond Fund is no longer commercially viable. With the proposed merger into the £1 billion+ M&G Strategic Corporate Bond Fund, managed by Ben Lord and Richard Woolnough, it provides investors with access a similar strategy but with the opportunity to invest in assets beyond those denominated in European currencies.

Stefan Isaacs, Deputy CIO Fixed Income at M&G says: “Fixed Income strategies are back in vogue as investors seek real yields from the asset class as monetary policy responds to an inflationary environment. However, there is currently little interest from UK wholesale investors for specific allocations to European corporate bond strategies and we believe that there is little prospect of this trend altering in the foreseeable future. The proposed merger is the best option for investors as it provides an alternative investment solution for the long term, managed by an experienced investment team supported by our extensive in-house credit resource.”

The merger is subject to shareholder approval, with an EGM taking place to vote on the changes on 17 May, and investors will be informed of their options If approved, the merger will be finalised on Friday 9 June 2023.

Source: M&G