The funds selected
Please note that these funds are only available to you if you select Pathway 2, they are not available for direct investment through your Pension Choices Plan.
Why we’ve selected these funds
Information about investing
In order to understand the relationship between risk and reward, it’s helpful to first understand the different types of investment (known as ‘asset classes’).
The four main investment types are:
- Shares (also known as ‘equities’) give investors a portion of ownership of a company.
- Commercial property includes ownership of retail, office, and industrial property.
- Bonds (also known as ‘fixed-interest’ investments) are loans companies or governments take when they need to raise money.
- Cash refers to currency, deposit accounts (bank savings accounts), and other cash equivalents.
Each of the four asset classes offers a different level of risk and potential reward, so the split of these assets determines the risk level of the fund and therefore the potential for reward.
To help you understand a fund’s level of risk and reward we give each fund a risk rating. Our risk ratings are between 1 and 6 (with 1 being a lower risk and 6 being a higher risk).
- The lower risk and potential reward funds are likely to be less volatile, so will be invested in areas which are less likely to fluctuate in value.
- The higher risk and potential reward funds are likely to be more volatile, so will be invested in areas that are more likely to fluctuate in value.
Risk rating
In Pathway 2, you will be invested 90% in corporate and government bonds, with 10% investment in international equities, across the three underlying funds. The split of these assets determines the overall risk level of the pathway and therefore the risk and potential reward.
Because some types of asset change value more than others, we will automatically adjust the amount invested in your funds each month to bring them back in line with the target percentages for the pathway.
A closer look at corporate and government bonds
All bonds are really an 'I owe you' that promises to pay an amount of money on a specified date and pay a fixed rate of interest along the way. Companies and governments can issue bonds, when they want to raise money. Bonds issued by companies are called corporate bonds. Bonds issued by the UK government are called gilts, and those issued by the US government are called treasury bonds.
A closer look at international equities
Equities are also known as shares or stocks. They are a share of the ownership of a company. Shares have two potential benefits. Firstly, the share price moves as the value of the company changes. Also regular payments, called dividends, may be made to the owners of the share. These are based on how well the company is doing (remember, they can go down as well as up in value). International equities will be invested in companies based all over the world but focused on the larger economies.
Find out more about the Pathway 2 funds
If you would like to know more about the funds that make up Pathway 2, please take a look at the fund factsheets:
Prudential M&G Corporate Bond Fund (68%)
What fund charges and further costs are there for Pathway 2?
We take an Annual Management Charge (AMC) for looking after your investment, from each of the funds you invest in. Any further costs shown are expenses which are borne by the fund. Together they add up to the yearly total (%). These are shown in the table below.
The funds are actively managed by expert Fund Managers who make the day to day investment decisions on behalf of investors. This active management of funds aims to achieve greater returns for investors than funds using less active management, and this can come with a higher cost.
We take the AMC for the funds in Pathway 2 by the deduction each day of 1/365th of the applicable Annual Management Charge, from each fund.
All money you have invested in your Pension Choices Plan will benefit from an AMC discount of 0.30% regardless of how much your fund is worth. Please refer to the Key Features Document for more information.
Please see the table below for details of fund charges and further costs for Pathway 2; note that further costs are indicative and are correct as at 19 January 2026.
| Pathway 2 | I plan to use my money to set up a guaranteed income (annuity) within the next five years |
|---|---|
| Fund names | Prudential M&G Corporate Bond Fund (68%) Prudential M&G Gilt & Fixed Interest Income Fund (22%) Prudential International Fund (10%) |
| AMC | 1.00% |
| Further costs | 0.00% |
| Fund size discount | 0.30% |
| Maximum yearly total | 0.70% |
Fund charges and further costs may vary in future and they may be higher than they are now.
For further details of charges please refer to the Pension Choices Plan Fund Guide.
What to do next
If you want to use Investment Pathways or have any questions, please call our customer service team on 0808 234 2372. They can’t tell you which option to choose, or give you financial advice, but they are here to help you. We might record your call for training and quality purposes. To find out more about how we use your personal data please visit the My Data page.
Funds available
Find out about the funds selected to match each Pathway objective
