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 Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Play CIO Tapes: do investors have it as good as it gets?

CIO Tapes: do investors have it as good as it gets?

Citywire gathered three of the UK's leading fund investment heads to discuss what they fear and what makes them cheer about the year ahead

Read More
Your Business: Cover Star Club

Profile: Rathbone's Newcastle boss on the road to £1bn

Profile: Rathbone's Newcastle boss on the road to £1bn

Starting from zero assets on day one, Rathbone's Newcastle team now looks after just over £400 million in clients money

Wealth Manager on Twitter