Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

M&G bond fund investors hit by income blunder

M&G bond fund investors hit by income blunder

M&G has apologised to investors after a tax miscalculation led investors in the firm's High Yield Corporate Bond taking an income hit for December.

The fund group has sent letters to 32,000 investors warning them that the distribution in one of the popular sterling share classes of the fund, managed by Stefan Isaacs, will fall from 0.166p per share to 0.145p in December, a reduction of 12.65%.

M&G attributed the error to the failure to deduct tax from distributions earlier in the year.

This is the third calculation mistake M&G has made on the fund. In August it was forced to write to investors in the High Yield Corporate Bond fund informing them a glitch which resulted in them receiving overpayments. This followed a similar mistake in May.

A spokeswoman for M&G said: ‘We are very sorry that this accounting error has happened and to prevent this type of error from reoccurring we have increased the frequency at which tax deductions are monitored and controlled.’

'We have written to all income shareholders in M&G High Yield Corporate Bond fund to apologise and explain an accounting error which will result in the December distribution payment being lower than investors may be expecting.

‘Tax was not deducted correctly from the fund’s August and November distributions, which meant shareholders received a higher distribution than they should have. This error was identified by M&G’s fund administrators, State Street, and the correct tax has been deducted from the December distribution.

M&G said it acted as swiftly as possible to rectify the issue and that the fund has now paid the correct amount of tax and its total return will not be impacted.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Play Henderson's Lofthouse on merger boost and political risk

Henderson's Lofthouse on merger boost and political risk

Ben Lofthouse talks through where he is finding income and what surprises await the global economy in the new year.

Read More
Your Business: Cover Star Club

Profile: why Patronus Partners' founder left the only job he ever knew

Profile: why Patronus Partners' founder left the only job he ever knew

'There was a definite idea of how things would work out over 12 months. When we look back, that was inaccurate'

Wealth Manager on Twitter