The group announced it would move the funds, which have a cumulative market value of £6bn (€6.8bn, $7.6bn), outside of the UK to protect the interests of M&G’s non-UK domiciled customers as Brexit negotiations continue with ambiguity.
The funds affected are the M&G Dynamic Allocation Fund (£4.2bn), the M&G Income Allocation fund (£823m), the M&G Prudent Allocation fund (£982m) and the M&G European Inflation Linked Corporate Bond fund (£68m).
All four funds will be equivalent Luxembourg Sicavs and follow identical strategies to the current UK-domiciled funds. They will be run by the same fund managers.
The M&G Prudent Allocation fund will be renamed M&G (Lux) Conservative Allocation fund.
Anne Richards, chief executive of M&G, said: “With little clarity yet on the outcome of the negotiations between the UK and the rest of the European Union on its future trading relationship, we believe it is prudent to take action now to protect the interests of our international customers.
“The proposals to transfer the assets of these four funds have a primary aim – to minimise disruption for our investors. Approval of the transfer will ensure they retain access to the same strategies and the same fund managers.”
The Luxembourg financial watchdog, the Commission de Surveillance du Secteur Financier (CSSF), and the Financial Conduct Authority have both signed off the proposals.
Fund shareholders will be formally notified of the proposals in early September and M&G expects the assets to transfer towards the end of November, subject to shareholder approval.