M&G is to merge its £81m UK Select and £546m UK Growth funds under the management of Mike Felton.
Both funds are currently managed by Felton, who took on the management of the UK Growth fund in December with former manager Garfield Kiff becoming the deputy manager on the fund.
Felton returned to M&G after a three-year period of sick leave in August 2011 to resume management of the UK Select fund. Kiff managed the fund as interim lead manager in Felton’s absence.
Felton initally began running the UK Select fund in 2004.
Both funds are currently third quartile in the Investment Management Association UK All Companies sector over three years. The UK Growth fund has returned 24.3 per cent, while the UK Select fund has returned 22.7 per cent compared to a sector average return of 27.9 per cent.
The move is subject to shareholder approval and is expected to take place on March 15.
M&G says Felton has been applying the same investment approach to the two funds and, as a result, they have become increasingly similar. The group says merging the funds will formally align them into a single portfolio, avoiding the duplication of constructing two funds