M&G responds to demand
with corporate bond feeder
BY DANIEL JUDGE
UK fund manager M&G
has launched a Guernseydomiciled
version of its
£1.3bn Strategic Corporate
Bond Fund.
The investment house,
owned by Prudential, said
the vehicle would be a
feeder fund into Richard
Woolnough’s UK Strategic
Corporate Bond Oeic.
The launch is in response
to demand from offshore
investors, M&G said.
Over three years to 14
July 2009, Woolnough’s
onshore fund has returned
19.07% compared with a
loss of nearly 7% in the
Trustnet Offshore Unit
Trust Sterling Corporate
Bond Retail universe.
The Strategic Corporate
Bond has, with the Invesco
M&G Strategic Corp Bond vs index
40
30
20
%
10
0
-10
UT Sterling Corporate Bond Retail
Jul ’04 Jul ’05 Jul ’06 Jul ’07 Jul ’08
Source: Trustnet Offshore
Corporate Bond Fund,
been a major beneficiary of
the millions of pounds that
have flowed into UK corporate
bond funds this year
as investors have sought
the security of fixed income
in volatile equity markets.
IMA figures have dem-
M&G Strategic Corporate Bond
Jul ’09
onstrated the popularity of
the sector, with nearly
£1bn of inflows recorded
in February alone.
Woolnough’s fund primarily
invests in investment
grade debt but can
hold up to 20% of its assets
in high-yield debt.
EEA ‘wider gate’ option to
make redemptions easier
EEA Fund Management
has changed the rules covering
redemptions from its
Life Settlements Fund by
introducing a ‘wider gate’
option that makes it easier
for investors to withdraw
their money.
EEA has also created a
so-called dilution levy,
which allows the fund’s
directors to charge a fee to
investors who redeem
more than 5% of the entire
fund, if fund assets must to
be sold to meet the
redemption.
This is designed to protect
remaining fund investors
if EEA is forced to sell
assets at below its valuation
in order to meet large
redemptions.
Although the changes
took effect only two weeks
ago, news of the measures
was circulated among
investors in advance and
FUND NEWS
contributed to a significant
increase in inflows in the
month of June, according
to EEA group marketing
director Peter Winders,
who said the monthly
total was about $45m, up
from around $30m in an
average month.
This brings the fund’s
assets under management
to $528m, he added.
The wider gate option
affects a policy under
which EEA could defer a
redemption request if it
constituted 10% or more of
any of the Life Settlements
Fund’s share classes.
This definition has been
broadened to apply only to
redemptions amounting to
a tenth of the fund’s
total assets.
The move makes it less
likely deferral of redemptions
will be imposed,
according to EEA.
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