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Annual Value Assessment

At M&G, our purpose has long been to help our customers prosper by putting their investments to work. Delivering value is a key aspect of this. In mid-2020, we will publish the first annual assessment of the value provided to investors in each of our UK-based funds.

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Why are M&G doing this?

Our regulator, the Financial Conduct Authority (FCA) has published new rules and guidance to improve the quality of the information available to consumers about the funds they invest in. As part of our duty to act in the best interests of investors, we will be making an annual assessment of the value provided to our investors.

What will this involve?

We are undertaking a rigorous review of the value delivered to M&G’s investors according to a breadth of factors that contribute to investor outcomes. Our best efforts to present this analysis in a fair and useful way will be reflected in our final published report.

What will the report look like?

We will award an overall value rating to each fund and, importantly, each share class. For every fund and share class, we will evaluate the value provided to our customers according to a set of seven specific criteria.

What are the criteria for value?

In line with FCA requirements, we will consider each of the following criteria:

  1. Quality of services — We will consider the quality of each service delivered to our investors. Key services include not only those directly supporting investors, but also those vital to the good running of our funds.
  2. Investment performance — We will measure investment performance against all the stated objectives of a fund, and against its comparator, to evaluate whether value has been delivered over an appropriate time period.
  3. Costs of the Authorised Fund Manager (AFM) — We will assess the costs of the AFM, which is responsible for the overall management of M&G funds, to evaluate whether our charges are justified in relation to the costs.
  4. Economies of scale — We will assess the extent to which any savings arising from the scale of a fund are reflected in value for our investors.
  5. Comparable market rates — We will compare the charges for each of our funds to those of other funds in the same sector, to ascertain whether relative value is being offered to our investors.
  6. Comparable M&G services — We will compare the services delivered to our investors with other customers whose investments are managed in a very similar way by M&G, to evaluate the relative value delivered.
  7. Share classes — We will analyse who invests in the share classes of each fund, and evaluate whether our investors are in the most appropriate share class.

When and where will the report be published?

Our first annual report will be published no later than 31 July 2020. Our analysis will be based on the latest information as at 31 March 2020.

The report will be published to our website and clearly signposted. Later this year, investors will be advised of how to access the value assessments via their regular statements and the annual fund report.

The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.
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