On a conference call with investors Woolnough said that while M&G would look to slow inflows into these two funds, the more flexible mandate of the M&G Optimal Income fund meant it would remain fully open to investors.
Woolnough told investors: 'Both funds have grown rapidly and as they have become larger it has become more difficult to apply my investment process. The M&G Corporate bond will remain open but we will look to slow inflows.
M&G's global head of retail sales Jonathan Willcocks said that the group would be contacting its largest clients in the coming days to explore ways to slow inflows to the two funds.
'There is no simple step to slowing funds but we will contact key clients to see if we can reduce the pace of inflows,' he said.
In the call, Woolnough said that the US economic crisis had now been largely resolved but that Europe had yet to reach its critical moment.
'The huge boom created by the Fed has come to an end and the US economy has worked its way through the crisis and the inventory but Europe is not so far through.'
'In Europe the average divergence between countries in terms of unemployment is huge and the tools to get convergence are not working. The monetary policy of the eurozone means the strong get stronger while the weak get get weaker because the weakest have the tightest fiscal deficit.
'Countries like Spain don't have an option to devalue the currency like the Swiss or the UK so the problem gets worse. Unlike in the US, we have yet to reach the crunch point where the problem wgets resolved,. That means full union or currencies reintroduced.
As for the UK, Woolnough concurs with BoE governor Mervyn King that we are probably not yet half way through our own debt crisis and describes its predicament as somewhere between the US and the UK.
'We are going to see lots and lots more QE and the lack of supply of gilts will drive them down so 10 year gilts will remain at record lows. The BoE is pursuing a low rates policy and further QE so an unconventional bond market is what we have and that is the world we live in.'
Over the last year, Woolnough has trimmed his underweight duration and increased credit within the corporate bond portfolios. Being underweight banks remains his biggest active bet in the corporate bond portfolios.
He thinks that overall, corporates are in 'great shape' and at their most healthy for 10 years despite spreads remaining quite wide. While many corporate balance sheets are strong due to deleveraging, he says that financials' own deleveraging programmes are not as profitable for them, citing Lloyds' recent sale of high street brances to Co-op.
'This is not great news for bondholders and the main people that matter to a bank are not the bond holder but the people that vote and work for the banks. The government will want their money too so they stand before us in the queue.'
'It is a vicious circle. Virgin or BT 's credit rating does not affect people using their services but it does with banks. The underweight to financials has hurt us in the first half but over one year they have done badly and this has helped us.'
Over one year to 20 July 2012, the M&G Corporate Bond fund had returned 14.68% compared to the Markit iBoxx Sterling Corporates TR benchmark return of 12.38% while the M&G Strategic Corporate Bond posted 13.87%.
Over five years the M&G Corporate Bond and Strategic Corporate Bond fund had respective returns of 61.23% and 74.17%, compared to the benchmark's 34.39%.