It now has £15.2bn of retail assets, compared with Fidelity’s £14.3bn, according to IMA figures for June.
Much of M&G’s growth can be attributed to the success of its bond funds. Its flagship corporate bond fund, managed by Richard Woolnough has more than doubled since January from £1.6bn to £3.8bn while the strategic corporate bond fund, also managed by Woolnough, has grown from £381m to £1.3bn in the past six months.
Invesco Perpetual is the retail fund leader with £26.9bn.
In June 2007, Fidelity had £21.6bn in retail funds, meaning the firm has lost around a third of its assets in the past two years.
Whitechurch Securities managing director Gavin Haynes says: “M&G is pretty strong across the board. It was once seen almost purely as a fixed-interest house but has grown in recent years in UK and overseas equities, such as its successful recovery fund. Fidelity remains a safe pair of hands but has not stood out as much as it should have.”