Each month RealAdviser asks a panel of fund selectors to give their verdict on a company's fund range. This month M&G gets the once-over
ALAN DURRANT, CHIEF INVESTMENT OFFICER AT SKANDIA INVESTMENT MANAGEMENT I had got so used to M&G not having an exciting story, that it was tempting to dismiss it.
But looking closer, it now has a number of quite exciting stories.
If anything the group is punching below its weight in its marketing message.
On the fixed interest side, Richard Woolnough is a star in the corporate bond world.
His numbers back up that he has done a good job.
Mike Felton was another big coup.
He is a favourite with multi-managers who like focus managers.
He clearly plans to replicate his success at ISIS with the M&G Capital fund (soon to be renamed the M&G UK Select fund).
There have been questions over whether he can succeed with a larger portfolio.
This would be an issue if he was running a small cap or special situations type fund, but that has never been the way he has managed money.
He mainly focuses on the mid and small-cap stocks, so size should not be a problem.
On a broader view, I have been very impressed with David Jane, who is a forthright character who knows what he wants to do with the business.
PATRICK ARMSTRONG, HEAD OF FUND AND MANAGER SELECTION AT INSIGHT INVESTMENT We currently do not have any investments in M&G funds.
In the past we have held a gilt fund.
We have a favourable view of the process and team behind it, but are tactically short duration at the moment, and this was the reason we sold the fund.
There are also a couple of other funds we are monitoring quite closely.
We were a large holder in Mike Felton's fund when he was at ISIS prior to his move to M&G.
We have confidence in Mike's approach, and his ability to get the most out of the people around him.
Since Mike joined M&G, there is now a shadow analyst for all the sectors, where a portfolio manager assumes sector coverage, in order to challenge and enhance the research analysts' views and recommendations.
We prefer to monitor, rather than invest at the moment, because we think there will be further improvements to the team, and it will take a period of time for the new changes to become fully functional.
We are also monitoring the M&G property fund.
The fund is managed by Prudential Property Investment Management (PruPim).
We find the PruPim proposition attractive because of its scale, the experience of its managers and their disciplined approach to investing in commercial property that uses the sophisticated in-house evaluation, analysis and forecasting tools.
The combination of these three factors has led to strong relative and absolute returns since the launch of the fund.
JASON BRITTON, FUND MANAGER AT T.
BAILEY ASSET MANAGEMENT Few investment houses manage as many assets as M&G, which provides it with two long-held strengths - firstly its access to company management has few peers and secondly it is able to afford an impressive pool of research talent.
Traditionally, M&G has not always managed to capitalise on these benefits, particularly in its home market.
However the arrival of Mike Felton as head of UK equities means that at last performance is beginning to shine through - six of the group's eight funds within the UK All Companies sector were ranked in the first quartile over the first half of 2005 (an admittedly short period, but an impressive feat nonetheless especially as the two exceptions were an index fund and a fund of funds).
Hopefully the eight UK products will be trimmed to a more sensible number and the nomenclature of them improved (the current names do not adequately make clear what they are about) but these are challenges for the coming months.
For now it looks very much as if M&G is making impressive progress in its aim to return to the upper echelons of UK management.
ALAN STOKES, HEAD OF MULTIMANAGER, LAWRENCE HOUSE FUND MANAGERS The last few years has seen a fundamental change at M&G as it has sought to regain the premier status it enjoyed during the 1980s.
The first and arguably the most important change has been the appointment of David Jane as head of equities.
Under his guidance M&G have started to ring the changes.
The appointment of Richard Woolnough, poached from Old Mutual, has strengthened an already strong fixed income team and more recently recruiting Mike Felton was seen by the industry as a further sign of the company's intent to regain its former status.
By focusing back on historic core M&G values such as performance and service it is hoped that the company will be able to regain ground that it lost during the 1990s.
However, this may not be that easy given the large number of boutiques that have sprung up in the intervening period.
Nevertheless with performance numbers improving, spectacular results from specialist funds such as the Global Basics Fund managed by Graham French, I would not bet against them.
MARK DAMPIER, HEAD OF RESEARCH, HARGREAVES LANSDOWN M&G is improving; it has capable managers in the shape of Graham French, Richard Woolnough and David Jane.
But despite this improvement, the group has lost its place in the market, something that is incredibly difficult to get back.
Times have changed for the group, in the 1980s everyone was expected to hold an M&G fund within their portfolio.
Nowadays that is no longer the case, as groups like Jupiter and New Star have taken that mantle.
Another problem the group has is that it tries to manage too much money - for example the corporate bond is well over £1bn, making it hard to manage because of its sheer size.
The group also concentrates 90% of its resources on 10% of its funds.
M&G has tried to live on its name, but once you have dropped the ball it is hard to pick it back up.
The group has stopped the rot and begun to go in the right direction, but rebuilding that trust and position in the industry takes time.
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