M&G is closing three sector funds, merging two more into funds with wider remits and renaming and repositioning another in response to a downturn in demand for sector-specific offerings.
The £13.7m global financials, £2.3m global healthcare and £13.6m global media & communications funds are closing, with the offer of a free switch into another M&G fund.
M&G is renaming its £236.6m European blue chip fund as the M&G pan-European fund and broadening its objectives to allow it to invest across companies of all sizes and not just large-cap firms. Investors not choosing a new fund will be placed into the M&G global leaders fund.
The £13.1m innovator fund will be merged into the smaller companies fund while the £2m European technology fund is to be merged into the global technology fund.
The firm has started a communication drive to tell IFAs of the changes which are expected to be completed by the middle of September. The FSA has approved the changes and the mergers and changes of objectives are subject to a shareholder vote.
Chief executive UK retail Gary Shaughnessy says: “There is still interest in global funds but we believe that investor and intermediary demand for certain sector-specific funds has reduced and for this reason we are closing our financials, healthcare and media & communications funds.”
Hargreaves Lansdown head of research Mark Dampier says: “Business is really tough out there and M&G is listening to the marketplace. Not much money is coming into the market and only going into about 30 funds but there are 1,600 funds out there so we can expect more closures.”