French told investors: 'This is the first time in 12 years that the fund has seen redemptions.'
'It is painful but we totally understand. It does mean the big holdings have become even bigger but we have to accept that.'
The fund reached a peak of over £6.6 billion in June 2011 but has gradually fallen away after a period of underperformance. As recently as March 2013 the fund stood at £5.5 billion but by the end of September 2013 it had fallen to £4.4 billion.
Selling resources, buying health care
French was frank in addressing the issues that led to a period of sharp underperformance early last summer after a huge drop in the share price of core holding global services group G4S and a collapse in commodity prices affecting holdings, such as Iluka Resources.
He said: 'Last summer G4S was a disaster and it took 2% off performance after it collapsed on the Olympics debacle.'
'We [also] saw a huge collapse in commodity prices too but sold out of all our commodities last summer so we took the pain early.'
'It was a difficult May and June 2012 and we apologise. My money and my parents' money is in the fund and I'm sorry that I misjudged the depth of the management of G4S.'
French said he had 'taken the hit' early after selling five or six commodity stocks representing 5% of the fund, last summer.
He also admitted to selling out of consumer stock Yum Brands too early, although more recently its share price had started to fall back on fears over slower than expected growth from its KFC franchise in China.
The fund manager added that the decision to sell out of all his gold and mining stocks 18 months ago had been the right one as they had continued to struggle and he believes gold miners are continuing to squander their capital.
French does however continue to stand by platinum miner Umicore as he believes tightness in supply of the metal over production issues in South Africa and ever growing demand for its use in the clean energy sector will sustain its price.
North American exposure
Performance had also been impacted by a long standing underweight to US stocks, as well financials and tech.
French admitted: 'We think financials and tech offer great opportunities and we will go there when we find cheap valuations. We are not very good at assessing tech and financials but at M&G we have good younger managers who can understand the sector better than I.'
French did however say that while last summer had left him at times to putting his 'head under the duvet and not getting up in the morning' he now had regained his investment appetite.
'I have the fire back in my belly again. It didn't feel good last summer but for the last 12 months I have been fired up again.'
French continues to gradually move up the economic development chain with around 70% of the fund now in industrials, food and agriculture and lifestyle stocks.
Recent fund additions have come from health care and lifestyle stocks. Health care is currently at 8% of the fund, but French says he expects it to gradually grow to 15-20% as the developing world continues to inherit the health problems of the developed world.
As French continues to address the issue of concentration of core holdings, key new positions have been added in UPS, United Technologies and French media group Publicis which together make up 15% of the fund.
Looking to add emerging market exposure
French's long term aim of having around 20% direct exposure to emerging markets by 2020 was knocked back by the volatility in the sector over the past couple of years but he is eying a number of Brazilian and Turkish companies that are falling closer to attractive valuations.
'I have a few Turkish and Brazilian names and one or two Indonesian companies. Two years ago emerging market valuations did not make sense but now this is a great environment to slowly pick up a Brazilian rail company or Turkish brewer.'
Over the three years to the end of September 2013, the fund returned 18.15%. This compares to a 40.57% rise by its customised benchmark, the M&G Global Basic Composite over the same 36 month period.