View the article online at http://citywire.co.uk/money/article/a888262
Investors pull £11bn from M&G amid bonds sell-off
Country's biggest bond manager saw retail investors pull £10.9 billion from its funds last year amid fixed income sell-off.
Investors pulled £10.9 billion from funds run by M&G Investments last year, as a sell-off in the bond markets strengthened.
The country's biggest bond fund manager was hit by a steady flow of retail investors out of some of its big fixed income funds throughout 2015, which saw a spate of heavy sell-offs in bonds.
M&G said the outflows 'reflected the continuation of a market-wide change in investor sentiment away from fixed income, against a backdrop of high levels of volatility and macroeconomic uncertainties, conditions that have continued into the early part of 2016'.
Although it did not name specific funds, chief among the victims is likely to have been M&G Optimal Income , run by Richard Woolnough (pictured), which has shrunk from £24 billion a year ago to £15 billion.
Figures from Morningstar show the fund's pain has continued into 2016, with £864 million walking out the door in January as investors withdrew the biggest amount of money from funds since the financial crisis.
'Commentators have been forecasting the bond apocalypse for six years now, yet the asset class has confounded predictions, with prices driven up by falling interest rates and macro-economic worries that simply won't go away,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.
'However 2015 saw the first interest rate rise in the US for nine years, and some investors have clearly taken this as a sign that the end of the bull run in bonds is nigh.'
The outflows are unlikely to have been confined to the group's bond funds either. M&G has two large funds that have fallen from former glories, the Recovery fund run by Tom Dobell and Global Basics , handed to new manager Jamie Horvat at the end of last year.
Both have shrunk in size at a rate exceeding losses made over the course of the last year, with Recovery, which stood at £5.1 billion at the beginning of last year now housing £3.4 billion and Global Basics down to £1.7 billion from £2.5 billion over the same period.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the funds
Look up the fund managers
More from us
- Investors pull £463m from funds in turbulent January
- Third time lucky? M&G hands Global Basics to Horvat
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.
by Gavin Lumsden on Jan 20, 2017 at 17:01