M&G's net inflows hit all-time high, but UK sales down

M&G saw net inflows soar to an all-time high in 2012, but sales into the UK fell year-on-year following its attempts to stem new money pouring into two of its flagship bond funds.

Net inflows surged to £16.9 billion, up from £4.4 billion in 2011, including a record fourth quarter, with the group citing a return of investor risk appetite in Europe as a major driver of growth.

The group said it expects weaker UK sales to persist following its move to stem inflows into its Richard Woolnough-managed Corporate Bond and Strategic Corporate Bond funds last July.

However, total net fund sales of £5.3 billion in Continental Europe reached a record high for the group and overseas sales are accounting for a growing amount of total retail funds under management, now at 29% compared to 25% in 2011.

Underlying profits for the full year rose by 14% to a record £298 million with total funds under management reaching £228 billion, up from £201 billion at the end of 2011.

Commenting on M&G's outlook, Prudential group chief executive Tidjane Thiam said: 'Looking ahead, the diversification of our business by asset class and geography positions us well to manage the expected shifts in consumer asset allocation going forward.'

M&G’s strong year helped parent group Prudential achieve a 54% increase in pre-tax profits to £2.81 billion last year. The group has risen its full year dividend by 15.9%.