M&G is to convert its unit trust range to Oeics in a move which will make
its entire fund range available on a dual charging basis.
The conversion, which is set for completion on Nov-ember 1, will offer
investors the choice of two different share classes on each of M&G's
For investors who do not want to pay an initial charge, which varies
depending on the fund, the annual management fee will typically rise to 1.5
per cent from 1 per cent.
However, IFAs will still be paid front-end commission on no-load funds,
typically at 3 per cent.
M&G is also set to introduce free switching on all its funds, axing its
current 2.5 per cent charge for all transfers within the M&G fund range.
As with all Oeics, M&G's funds will all be single priced, eliminating the
bid-offer spread, which the company says is confusing for investors.
The company will write to unitholders on September 25 to seek their
app-roval for the changes.
Managing director (UK retail) Phil Wagstaff says: “We wanted to bring nil
initial charge funds across our entire range. In 1994, M&G pioneered no
initial charge funds.
“Although the majority of people want nil initial charge funds, most IFAs
wanted the choice. We now offer both.”