M&G is to roll out no-load shares across its entire mutual fund range, following its conversion to a...
M&G is to roll out no-load shares across its entire mutual fund range, following its conversion to an Oeic structure this autumn, writes David Griffiths.
The rollout will not take place immediately upon conversion but will be introduced gradually from the start of next year. The only exemptions will be the fund of funds range, which at present cannot be Oeiced.
The Oeic will offer two share classes, a standard retail A-share, which will have the same charging structure as the existing unit trusts, as well as the no front-end load share class. Investors in unit trusts are currently charged an initial fee of 5% and an annual management fee of either 1% or 1.25%, depending on the fund.
At present, the no front-end load proposition is only available on 13 of M&G's most popular unit trusts. Investors are subject to an exit charge of 4.5% in year one, which falls to 0% after five years. This exit charge structure is likely to apply across the no-load share range following the Oeic conversion.
Intermediary commission is likely to remain at 3% for all funds offering no-load shares, following the conversion.
There would be no charge for switching between funds under the Oeic umbrella. There is currently a 2.5% fee when switching between unit trusts.
More than £167,000 raised
Beware ‘temporary’ vulnerability
Partner Insight: A renewed focus on 'knowledge-intensive' companies should help investors realise that these entrepreneurial companies are found in sectors other than biotech or technology.
Celtic WM and Active Wealth