Skip to Main Content
For UK financial advice professionals only
For UK financial advice professionals only
How can we help you?

PruFund smoothing

Give your clients the gift of composure

Smoothing is as much a behavioural tool as it is a financial one

Volatility doesn’t just stress-test portfolio design – it tests resolve.

PruFund’s smoothing mechanism cushions the impact of short-term market movements, giving clients the composure to stay the course when others don’t. Less short-term noise, same long-term potential, greater peace of mind.

The value of any investment can go down as well as up so your customer might not get back the amount they put in. 

How smoothing works

Watch our smoothing explainer
Multi-asset fund

Multi-asset diversification reduces risk and smooths out returns relative to pure equity funds.

Expected Growth Rate (EGR)

PruFund's unit price will normally grow daily in line with the EGR. This is the smoothed price.

 

The EGR is based on our view of long-term asset returns (up to 15 years) and is reviewed quarterly.

Unit price monitoring

We monitor the gap between the smoothed and unsmoothed price daily. Formulaic adjustments are made to the smoothed price if the gap exceeds defined smoothing 

Daily

If the gap exceeds 8% or 10%,* the smoothed price is adjusted to reduce the gap to 2% or 2.5%* of the unsmoothed price.

Monthly/quarterly

If the gap exceeds 4% or 5%,* the smoothed price is adjusted to reduce the gap by half.


*Depending on the fund

Other potential smoothing actions

In highly unusual circumstances, to protect the With-Profits Fund and all the clients invested in it, we may:

  • reset the smoothed price to the unsmoothed price 
  • or suspend the smoothing process. 

Emotion can be as destructive to wealth as volatility

Behavioural research confirms that emotional responses – not rational thinking – drive investor behaviour during times of volatility. Fear, panic and regret can lead to poor decisions at the worst possible times.

By reducing the intensity of market swings – and the emotional reactions they can trigger – smoothing helps clients stay disciplined and focused on the bigger picture. For you, that means fewer volatility‑driven conversations to manage.

In accumulation, volatility can be your ally – in drawdown, it can be dangerous

In accumulation, volatility can be beneficial: falling prices mean regular contributions buy more units, improving long-run average cost.

In drawdown, that relationship inverts completely. Pound cost averaging becomes pound cost ravaging. Falling prices mean regular withdrawals force the sale of more units, locking in losses at market lows, and permanently reducing the portfolio’s capacity to recover.

Smoothing can help you manage behavioural and sequencing risk.

Comparing smoothed and unsmoothed multi-asset funds*

Smoothed
  • Smoothing applied to market movements
  • More stable investment journey
  • Lower behavioural risk
  • Similar long-run expected returns
  • Drawdowns more moderated
Unsmoothed
  • Daily mark-to-market pricing 
  • Full volatility experienced immediately
  • Emotionally challenging in downturns
  • Similar long-run expected returns
  • Drawdowns visible and jarring

*Generic smoothed fund comparison – please refer to the ‘How smoothing works’ section above for details specific to PruFund.

PruFund often becomes the gold standard by which everything else is measured.

What stands out is the consistency of returns over time and how well volatility is managed. Clients see it as a shield against sharp downturns, providing steady growth without the anxiety of sudden dips. That reliability earns their trust, and in blended portfolios.

Chris S, Clear Financial Solutions

Plan with greater confidence

Address sequencing risk proactively with a portfolio built to address volatility at its core

Limit the severity of market downturns which can impair long-term outcomes – reducing the need for reactive intervention. 

Enter client conversations with assurance

“The engine of your portfolio is designed to smooth your investment journey” is a more intuitive explanation than asking clients to trust that volatility will simply resolve over time.

Blend PruFund with equity-focused satellites to gain the best of both worlds

The growth potential typically associated with equity-heavy allocations and the emotional stability which smoothing provides.

Learn more about what makes PruFund different

Deeper diversification

Access a broader investment universe, underpinned by 40 sub‑asset types and over 100 strategies, actively managed with institutional-grade exposure across private equity, private credit, commercial real estate and infrastructure.

Learn more

Scale & structure

PruFund sits within the £134bn* Prudential With-Profits Fund – a life fund with the freedom and scale to invest in a wider range of assets than standard UCITS multi-asset funds. This structure and flexibility unlocks opportunities you simply won’t find elsewhere.


*Correct as at 31 December 2025.

Learn more

Ready to put PruFund to work?

Let’s talk about what PruFund can do for your clients – and your business.

Request a call back

The information provided is by Prudential Distribution Ltd, and/or M&G Wealth Investments LLP, Investment Funds Direct Limited, Prudential International Assurance and/or The Prudential Assurance Company. 

To understand M&G's business and brands, you can view our Corporate & Regulatory Information.

© M&G 2026