PruFund range of funds 2026 Strategic Asset Allocation

It is important to note that despite the volatility seen across markets this year, the changes we are making to the portfolios in 2026 are relatively modest.

While 2026 has so far been characterised by ongoing volatility and a number of market surprises, this year’s review has resulted in only minimal changes. This, in itself, is a positive outcome and reflects our confidence in the existing portfolio positioning and the robustness of the underlying asset allocation.

The adjustments that have been made are measured and disciplined – taking profits in selected areas after strong performance, reinforcing diversification across assets with defensive characteristics, and enhancing resilience in downside scenarios. Importantly, these changes ensure the funds remain comfortably within their defined risk appetites, while continuing to support long‑term objectives.

All changes apply to PruFund Growth, PruFund Cautious and Risk Managed PruFunds, and are designed to strengthen portfolio balance rather than repositioning portfolios in response to short‑term market noise.

• We have expanded the range of government bonds held within the portfolios. This includes increased exposure beyond the UK and US into markets such as Japan and Germany. The aim is simple – reduce reliance on any one country, and improve resilience if different regions perform differently
• Within the SAA tables, you will now see an allocation to “developed market bonds” of which will be made up of a diversified basket of US, German and Japanese government bonds 

• We have introduced exposure to Indian fixed income within the portfolios. India is an increasingly important global economy, with a strong growth outlook. The International Monetary Fund (IMF) expects India to grow at around 6-7% per year over the next few years; however, such forecasts are not reliable indicators of future investment performance
• Alongside this, the overall economic backdrop is improving:
• Government finances are becoming more stable, with better control over spending and borrowing
• Inflation is stabilising, allowing interest rates to gradually come down
• This combination supports a more favourable environment for fixed income investors. From a portfolio perspective, Indian bonds also offer higher yields than many developed markets and diversification benefits, as they are driven by different economic factors

While the long-term outlook is supportive, investing in Indian fixed income also involves additional risks. These include higher levels of market volatility, potential currency fluctuations, and political or regulatory changes that may affect returns.

• We have increased our allocation to ‘Other Factors’ an asset class within ‘Other Strategies’ – investments that behave differently to traditional equities and bonds. This includes:
• Trend-following (momentum) strategies – that identify and follow market trends across different asset classes moving strongly in a particular direction, and benefit from those trends. Historically they perform well during challenging market environments
• Volatility-based strategies – take advantage of how financial markets price uncertainty, where investors often pay a premium for protection against market volatility. By systematically providing that “insurance”, the portfolio can aim to generate more stable, incremental returns over time, even markets are less directional

These types of strategies can behave differently from traditional equities and bonds, and their performance will vary depending on market conditions. They may be more complex and may not always deliver positive returns.

Investments in global markets may be affected by currency fluctuations. Certain assets, such as private markets, may be less liquid and more difficult to sell at short notice. Exposure to emerging markets may involve additional risks, including less developed market infrastructure, higher volatility, and political or economic uncertainty.

The new allocations by asset class for PruFund Growth and PruFund Cautious Funds from 1 May 2026 are available below.

Source: Life Investment Office as at 1 May 2026.

Overall, the changes are incremental rather than structural.

The portfolios remain:

• Well diversified across asset classes and regions
• Balanced between growth and defensive assets
• Positioned with a long-term focus

The 2026 SAA adjustments position the portfolios to navigate a wider range of economic outcomes, aiming to deliver strong long-term, risk adjusted returns while maintaining appropriate downside protection for PruFund investors.

These updates are about refining positioning and ensuring the portfolios continue to deliver for investors in a more uncertain and evolving market environment. While the portfolios are designed with long-term objectives in mind, investment outcomes are not guaranteed and will vary over time.

This content has been prepared by the Life Investment Office (LIO) for information purposes only and does not contain or constitute investment advice. Information provided herein has been obtained from sources that LIO believes to be reliable and accurate at the time of issue but no representation or warranty is made as to its fairness, accuracy, or completeness. The views expressed herein are subject to change without notice. Neither LIO, nor any of its associates, nor any director, or employee accepts any liability for any loss arising directly or indirectly from any use of this document. The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back less than the original amount invested and past performance information is not a guide to future performance.

‘Life Investment Office (LIO)’ includes the team formerly known as Prudential Portfolio Management Group (PPMG), Prudential Portfolio Management Group Limited, is registered in England and Wales, registered number 2448335.