The funds, both managed by Mike Felton, will be merged subject to shareholder approval.
If 75% of shareholder votes are cast in favour, the combined funds will amount to £630 million.
Felton (pictured) took over management of the UK Growth fund from Garfield Kiff in December last year. Garfield is now the fund’s deputy manager.
M&G said the two funds’ investment approach was becoming increasingly similar, and a merger would align them into a single portfolio and avoid duplication.
Felton joined M&G in 2005 as head of retail UK equities.
The UK Growth fund has returned 16.13% over five years, ahead of the FTSE 100 which delivered 10.41% over the same period.
The £81 million UK Select fund has also outperformed over five years against the same benchmark, returning 13.5%.