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.