M&G cuts charges for direct investors and plans to absorb research costs from next year

22nd May 2016

M&G Investments is to offer lower fund charges to its direct customers who sign up to a new online service.   All current and future customers invested directly in M&G ISAs and funds will be eligible for the new service, which is due to be launched later this summer.

The ongoing charge figure (OCF) for a typical M&G equity fund, such as the M&G Dividend Fund, will fall to 1.16% for all direct customers with at least £5,000 in their portfolios.   The firm says the OCF of a typical M&G bond fund, such as the M&G Corporate Bond Fund, will fall to 0.91%.    As an example, a direct investor with £2,500 in each of these two funds, who chooses to move to the new online service, will see the total annual charges he or she pays fall by £18.75.

In addition, while the transaction costs of M&G’s retail equity funds, which cover dealing and external research, are already among the lowest in the industry, M&G will stop charging all investors for external research altogether from 1 January 2017.  There will be no increase to the ongoing charge figure as a result of these changes; M&G will pay the costs of external equity research itself.

Michael McLintock, Chief Executive, M&G Investments, says: “The lower fund charges available through our new online service will help our customers’ savings work as hard as possible, whether that’s to provide an income in retirement today, or grow capital for the future.”


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