Jim Armitage: When a plural turns out to be singular


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Outlook An interesting email floated this way via a circuitous route, but originating from the fund manager M&G’s headquarters. It contained a document seeking pitches for a new public relations agency to handle the spin-doctoring for its UK division.

Naturally, the most interesting bit is where the company, which invests £257.3bn of our cash, lists the areas where it needs the most help; these include “Persistent performance issues on some important retail funds”.

So, several of its funds aimed at retail investors have been underperforming for a long time and are in need of some PR spin, right?

Wrong, says M&G. When asked which funds the company was referring to, a spokeswoman said there was only one – the M&G Recovery Fund. The use of the words “some” and “funds” in the tender document were “simply a turn of phrase”.

Er, OK, so what about those words “persistent performance issues”: that must mean poor returns for a prolonged period, right?

Wrong again. According to M&G, that expression means “short-term performance challenges.”

So “persistent” means “short-term.” Of course it does.

M&G’s document also says it has a “tentative desire to speak out more on industry and consumer issues”. Well, I’m all for that. But perhaps less positive is its concern about the “increased regulatory scrutiny of retail fund charges and costs”.

It’s easy to see why M&G might be worried about this: just this week, the Financial Services Consumer Panel demanded City watchdogs at the Financial Conduct Authority overhaul radically the way fund managers operate, to make the fees they charge the public more transparent. “Retail investors are particularly badly placed,” the panel said, when it comes to calculating how much the industry is making out of their investments.

The panel’s concerns should be taken seriously: they were largely based on a study by a former Hermes fund management director. Let’s hope M&G’s new PR firm – and all those other highly paid lobbyists in the industry – will not sway the FCA from acting.

Meanwhile, M&G’s quarterly figures just showed customers had pulled out a net £1.1bn from its UK operations in the past nine months. Try putting a positive spin on that.