Tom Dobell’s M&G Recovery fund has seen outflows of roughly half a billion pounds over this time, and FE Alpha Manager Graham French’s M&G Global Basics roughly £460m.
Richard Woolnough’s M&G Corporate Bond fund has seen outflows of about the same level, and his M&G Strategic Corporate Bond fund roughly £300m; they make up four of the top-seven retail funds with the biggest redemptions over the six months.
The bond funds have suffered in a difficult environment for fixed interest. Woolnough's portfolios are among the three biggest in the IMA Sterling Corporate Bond sector, which has seen large outflows in general.
Schroder All Maturities Corporate Bond also appears in the list of the funds shedding the most money, seeing outflows of £315m over the period, while Invesco Perpetual Corporate Bond has seen £300m of investors’ money withdrawn.
Fixed interest funds have suffered as worries over a possible end to QE programmes and a ticking up of interest rates have discouraged investors and pushed them into equities and other alternatives.
Corporate bonds, measured by the iBoxx Sterling Corporate All Maturities index, lost 7.26 per cent peak-to-trough when they sold off in May, with corporate bond funds losing a similar amount, according to FE Analytics data.
Performance of sector and index in 2013
Source: FE Analytics
The outflows from the two M&G bond funds outlined above are not the largest as a proportion of assets under management, highlighting that they are suffering along with the whole sector.
However, both funds have disappointed over the past 12 months and are in the bottom quartile of their sector over this time.
The £5.9bn M&G Corporate Bond fund has returned just 2.41 per cent over the past year, and the £5.5bn M&G Strategic Corporate Bond fund 3.05 per cent, compared with a sector average of 4.74 per cent.
This contrasts with an excellent long-term track record that has seen the latter fund produce the best returns in its sector over five years – 68.42 per cent – and the M&G Corporate Bond fund 56.52 per cent.
However, thanks to the more recent underperformance, they are in the second quartile of their sector over three years.
Performance of funds vs sector and index over 3yrs
Source: FE Analytics
It is interesting to note that Woolnough’s M&G Optimal Income fund has bucked the trend for redemptions, attracting net inflows over the period of £3.1bn, £1bn more than GARS.
This could be a sign that investors are happier with the fund’s more flexible strategy, which has seen it raise its weighting to equities to new heights.
However, the performance of the equity funds is harder to fit into a broader pattern.
Dobell’s M&G Recovery fund has underperformed since 2010, appearing in the fourth quartile of the sector in 2012 and 2013 so far.
For many years it was a regular top-quartile performer, winning that accolade in 2003 and then in every year from 2005 to 2009.
Its figures now look ugly over three and five years, however, with the fund appearing in the third quartile over the longer period and the fourth over the shorter.
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
Concerns have been raised that the fund has grown too big, making it impossible for Dobell to manage in the same style that made him so successful.
However, he told FE Trustnet in a recent interview that this was not true, and that the underperformance is down to stock-specific issues and risk-aversion in the market.
The £4.9bn M&G Global Basics fund has also suffered from weak short-term performance.
It made just 1 per cent in 2012 despite a decent year for the IMA Global sector, which returned 9.43 per cent.
This has made its three- and five-year numbers look very bad: the fund is in the bottom quartile over both periods.
It has been a tough time for the manager’s strategy. He buys companies operating in the basic industries, meaning basic materials and industrials.
Weak demand for commodities and a slowdown in emerging markets have hit these sectors, while G4S, a major holding, has had surprise issues of its own.
However, the fund remains highly rated by the FE Research team, and has five FE Crowns.
A spokesman for M&G says that while the company does not comment on fund flows on specific funds it had noted UK outflows and European inflows when parent company Prudential reported in the first quarter.
"It’s important to note that we've had tremendous growth in the last four years, with some big inflows, so it's natural to have seen redemptions since then," the spokesman said.
"We're comfortable with the size of our funds and do not see outflows as a problem. Managing open-ended funds for as long as we have at M&G, we are well used to handling flows in either direction and we build our portfolios accordingly."
The fund that has seen the largest amount of outflows, however, was Schroder UK Alpha Plus, formerly run by FE Alpha Manager Richard Buxton, which has clearly struggled to retain clients after his departure.
It saw roughly £1.4bn in client money depart in the period, and now has £2.2bn of AUM.
The second-largest amount lost was by the Scottish Widows UK All Share Tracker, which saw roughly £680m withdrawn.
BlackRock Gold & General saw roughly £270m withdrawn over the period as investors were hit by losses of 34.33 per cent.
BlackRock UK Absolute Alpha saw roughly the same amount of money withdrawn in a period in which long-term manager Mark Lyttleton left.
