Annual Value Assessment



M&G’s purpose is to help people manage and grow their savings and investments. Delivering value is a key aspect of this.

This report – the first annual assessment of the value provided to investors in each of M&G’s UK-based funds – is designed to help you to see whether M&G’s charges are justified in the context of the overall service we deliver.

Why are M&G doing this?

Our regulator, the Financial Conduct Authority (FCA) has published new rules and guidance to improve the quality of the information available to consumers about the funds they invest in.

As part of its duty to act in the best interests of investors, the Board of M&G Securities Limited (MGSL) will be publishing an annual assessment of the value provided to our investors. It is their responsibility, as the Authorised Corporate Director of M&G Investment Funds, to think and act on your behalf.

What does this involve?

The Board of MGSL has objectively evaluated the value delivered to M&G’s investors, in the year ending 31 March 2020, according to seven criteria set out by the FCA.

The Board have awarded an overall value rating to each share class of every UK-based M&G fund. Their conclusions for each share class, and according to each of the seven value criteria, are presented on a five-point scale, ranging from “outstanding” to “unsatisfactory”.

What is in the report?

Their best efforts to present this analysis in a fair and useful way have been reflected in this published report.

After an Overview from the Board of MGSL and information to help you interpret the report, each fund has its own section in the report. You can navigate to the fund – or funds – you are interested in by navigating directly from the Contents pages.

You can read more about the methodology of the Value Assessment, as well as some of the terminology used in the report, in the Appendix at the end.

Download the report

How do I check my clients’ fund and share class?

To find out the name of the fund your clients are invested in, like the “M&G Optimal Income Fund”, and the share class they hold, for instance “Sterling Class A Shares”, you can check the following:

  • If your clients invest directly with M&G using our postal and phone-based service, details of their holding can be found on their April half-yearly statement (example shown below).
  • If your clients invest in M&G funds through an online platform, they should be able to find details of their holdings on their online account.

What are the criteria for value?

In line with FCA requirements, the Board of MGSL have considered each of the following criteria:

  1. Quality of services — They consider the quality of each service delivered to investors. Key services include not only those directly supporting investors, but also those vital to the good running of our funds.
  2. Investment performance — They measure investment performance against all the stated objectives of a fund, and against its comparator, to evaluate whether value has been delivered over an appropriate time period.
  3. Costs of the Authorised Fund Manager (AFM) — They assess the overall costs of the AFM, in relation to the overall charges paid by investors, for the full range of UK-based M&G funds.
  4. Economies of scale — They assess the extent to which any savings arising from the scale of a fund are reflected in value for investors.
  5. Comparable market rates — They compare the charges for each of our funds to those of competitors in the same sector, to ascertain whether relative value is being offered to investors.
  6. Comparable M&G services — They compare the charges for each of our funds to those of similar funds and mandates managed by M&G, to ascertain whether relative value is being offered to investors.
  7. Share classes — They analyse who invests in the share classes of each fund, and evaluate whether investors are in the most appropriate share class.

Contact the team.