M&G UK Income Distribution A

Aims for a high and rising income stream from UK equities and bonds.

  • 614.92p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 6358.48p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 4.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.25%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.41%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 5.40%

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 23 September 2020, fund data last updated 18 January 2010

This fund aims for a high and rising income (50% higher than that of the FTSE AllShare Index) as well as some capital growth from a portfolio consisting of around 2/3 UK equities, 1/3 investment grade bonds. The equity component targets good quality out of favour companies with above average yields, whilst the bond element, corporate bonds, support's income generation.

Fund summary

Sector UK Equity and Bond Income
Structure OEIC
Launched November, 1973
Size £470m
Yield 5.40%
Charging basis Capital
Dividends paid 31 Jan, 30 Apr, 31 Jul, 31 Oct


Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.25%
Ongoing charges figure 1.41%


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Investment process

The Fund aims to achieve a high income stream which also increases over time, by investing mainly in a range of UK equities. The fund also invests in high quality corporate bonds to aid income generation - target yield is 50% higher than that of the FTSE All-Share index. The equity component of the fund is run using a bottom-up process (analysing companies in their own right), looking for high yielding stocks with strong business franchises, good cashflow characteristics and attractive dividend growth prospects. The yield requirement means the fund primarily comprises large and mid cap stocks and will have a bias towards the higher yielding sectors. The bond component of the fund comprises mostly investment grade (quality) bonds denominated in sterling, though high yield and government bonds may also be included. This area of the portfolio is managed by Richard Woolnough, who combines his views of the likely direction of economic factors such as economic growth, inflation and interest rates with a bottom up approach, when selecting individual bonds for the portfolio.

Bestinvest rate the funds of Richard Woolnough, manager of the bond portion of the fund, but not those of named manager Richard Hughes. Therefore we suggest investors looking for the same approach consider one of our rated UK equity income funds, combined with one of our rated UK corporate bond funds.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 0.38%
  • 17/18 -0.05%
  • 18/19 0.60%
  • 19/20 0.82%

Bestinvest MRI

  • 3 years 0.46%
  • 5 years 0.00%
  • Career 0.31%
  • 3 years 50.00%
  • 5 years 0.00%
  • Career 85.30%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Richard Hughes

Hughes joined M&G in 1986 and is a UK equity income fund manager. He previously worked for Derbyshire County Council for eight years where he was manager of their pension fund. He graduated from Sheffield University with an Honours degree in Accounting and Economics and is an associate of UKSIP.

Track record

Richard Hughes has 4.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.31%. During the worst period of relative performance (from February 2001 - November 2001) there was a decline of 14% relative to the index. The worst absolute loss has been 47%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 85%.

Periods of worst performance

Absolute -47.00% (December 2000 - March 2003)
Relative -14.00% (February 2001 - November 2001)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.


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Top 10 holdings

Data accurate as at 31 July 2020

4.6% Glaxosmithkline
4.5% Astrazeneca Plc
4.3% Rio Tinto
4.1% Bp
3% Lloyds Banking Group Plc
2.9% Vodafone Group
2.7% British American Tobacco
2.6% National Grid
2.3% Aviva
2.1% Hsbc Hldgs
Source: Trustnet

Sector breakdown

Financials 38.00%
Consumer Goods 12.00%
Health Care 10.00%
Utilities 8.00%
Oil & Gas 7.00%
Consumer Services 7.00%
Basic Materials 6.00%
Telecommunications 4.00%
Industrials 3.00%
Fixed Interest 2.00%


The official benchmark is a composite index comprised of two-thirds the FTSE All-Share Index and one-third the FTSE UK All Stocks Index. 60-70 equity holdings.


Equity weighting: Minimum of 55% in large caps; maximum 10% in small caps. Economic group weightings are limited to +/- 10% relative to the FTSE All Share, other than -15% services, +15% utilities.

Key Investor Information - Income


Key Investor Information - Accumulation