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Now, Prudential is introducing four mega funds under the M&G brand into the rapidly expanding Asian market, where it has seen 59% growth in fund inflows in the first nine months this year.
The four funds include M&G Global Basics Fund, M&G Global Leaders Fund, M&G Pan European Fund and M&G American Fund. Eileen Ma, head of channel management at Prudential Asset Management in Hong Kong, says the launch marks Prudential's first retail release in the city. Agreements with seven banks are expected to finalize before the Chinese New Year in 2008.
The M&G Global Basics Fund has $5.1 billion in assets and is managed by Graham French. Invested in primary and secondary industries around the world, it has delivered an 18.8% return over a 12-month period as of August 31, marginally higher than the 18.2% return of its benchmark FTSE Global Composite Index.
The Global Leaders Fund managed by Aled Smith invests in large-caps worldwide and has $2.4 billion in assets. Its 12-month period return was 14.2%, higher than FTSE World Index's 11.8% return.
Smith also manages the M&G American Fund, which has managed to deliver a return of 6.88% year-to-date, while the MSCI US Index dropped by 3.97% over the same period.
M&G Pan European Fund, with a portfolio of $766.2 million, invests in European mid-caps excluding UK equities. Giles Worthington has been managing this fund since 2003. The 12-month return of this fund was 16.4%, while the FTSE World Europe ex-UK was at 15.6% over the same period.
Prudential has been actively expanding in Asia, as growth in US and Europe slowed down in recent years. According to its latest interim results, 48% growth was recorded in PrudentialÆs revenue in Asia, while its UK home market dropped by 20% and US slowed to 8%. Over the same period, while M&GÆs operating profit was up by 40%, net inflow dropped by 30% to $7.5 billion due in part to institutional investorsÆ redemptions.
ôAsia has always been a core strategy. Businesses in Hong Kong and China are the places we must be in,ö says Ma.
PrudentialÆs fund management business had recorded a profit of $68 million in the first half this year, a growth of 65% compared with 2006. Buoyant market conditions in Hong Kong and Singapore are responsible for around 49% of that profit.
Following the introduction of these cornerstone products, Ma says Prudential will continue to expand its retail product lines in 2008. Depending on market conditions, another Asian equity fund could be added in the future.
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