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Changes to the M&G Extra Income fund

15 November 2016

M&G has told us it will be making changes to the M&G Extra Income fund on 16 December 2016.

Current Investment Objective and Policy: New Investment Objective and Policy:
The Fund invests mainly in a range of UK equities with the aim of achieving a high income stream which also increases over time. The target yield is 50% higher than that of the FTSE All-Share Index but this may vary in the shorter term. Although income will be the primary consideration, the investment manager will also be mindful of total return (the combination of income and growth of capital). Investment Objective:
The Fund aims to increase income distributions over time and targets a yield greater than that of the FTSE All-Share Index. Although income will be the primary consideration, the investment manager will also aim for capital growth.

Investment Policy:
At least 70% of the Fund will be invested in UK equities. Exposure to UK equities may be gained by investing in other collective investment schemes. The Fund focuses on good-quality but undervalued stocks that offer a higher income than the FTSE All-Share Index by identifying those companies that exhibit the following qualities: strong business operations, good cash flows and attractive dividend growth prospects. The Fund may also invest in sterling-denominated fixed income securities. Cash and near cash may be held for ancillary purposes and derivatives may be used for efficient portfolio management and hedging purposes.

Name change:

The fund's name will change to M&G UK Income Distribution.

AMC reduction:

I share class: Annual Management Charge will reduce from 0.75% to 0.60%. Ongoing Charges Figure will reduce from 0.91% to 0.76%
A share class: No change

Download the Extra Income Fund changes Shareholder letter.