Investing in equities* comes with many advantages. However, a portfolio made up of one or just a few individual shares leaves your charity with all it's eggs in one basket. It also leaves the investment exposed to a greater degree of risk than a more diversified portfolio containing several different asset classes.
In addition, it can be expensive to buy and sell individual shares and your charity doesn’t benefit from the extensive research capabilities available when investing with a specialist investment manager such as M&G.
How the scheme works
The M&G Share Exchange Scheme offers you an easy way to turn your charity's individual shares or gilts (bonds** issued by the UK government), listed on the London Stock Exchange, into an investment in an M&G fund. This allows your charity to enjoy all the advantages of a managed fund and the peace of mind of having a professional fund manager looking after it's money.
Investing in a managed fund enables your charity to spread it's investment risk across:
- different companies or asset classes
- different sectors
- different regions and countries
M&G will arrange for your charity's shares to be sold through a stockbroker - The Share Centre Limited. Their commission is paid by the charity and will be deducted from the proceeds of the sale before reinvestment. The shares are normally sold in the afternoon of the day on which we receive the share certificate(s).
Net proceeds are reinvested in your charity's chosen M&G fund(s) on the day the settlement is received (usually three days after the sale). This means that your charity's investment will be out of the market until we receive settlement for the sale. CREST Transfer Form(s) will be required for this transaction. A separate CREST Transfer Form needs to be filled out for each share your charity is selling.
The proceeds of the shares, minus any commission payable to The Share Centre Limited, are passed on to M&G with your charity's investment application form(s).
Please contact Customer Relations on 0800 917 4472 or email firstname.lastname@example.org for more information or to order a Share Exchange information pack.
The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.
We are unable to give financial advice. If you are unsure about the suitability of this investment for your charity, speak to a financial adviser.
* Shares of ownership in a company.
** A loan, usually taken out by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the loan is repaid.
The following charges are applied to each individual stock sold, rather than the total value of all stocks sold.
- 1.0% commission on the first £5,000 of the transaction value of each stock
- 0.5% commission on the next £5,000 of transaction value of each stock
- 0.25% commission on the remainder of each stock
- there is a minimum charge of £7.50 per stock sold
Any additional expenses that may be incurred when delivering the securities or registering them will also be paid by your charity. For example, a Stock Exchange Panel of Takeovers and Mergers (PTM) levy of £1 is payable on any transaction in excess of £10,000. The buyer of the securities will pay any stamp duty.
The M&G Share Exchange Scheme is only available for shares and gilts listed on the London Stock Exchange. We reserve the right to refuse to sell any holding where we consider there could be problems in arranging sale or delivery. Please therefore ensure that all certificates contain up-to-date details.
You should also be aware that there is a minimum commission fee for selling shares on the market. If the potential value of the sale falls below that minimum, we won’t be able to arrange the sale of those shares.
Rights issues and dividends
When your charity's shares have been sold, there can be a delay before the share register reflects the change in share ownership. This means your charity might receive a dividend*** or rights issue that is due to the purchaser of your charity's shares. Unless you’ve sold the shares exclusive of dividend or rights issues, your charity might receive a claim for payment that you are required to settle.
*** Dividends represent a share in the profits of the company and are paid out to a company’s shareholders at set times of the year.