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Prudential With-Profits Fund

Our With‑Profits Fund is a pooled investment fund, where your payments are combined with those of other investors and invested as part of a larger fund.

We aim to secure the highest total return for the Fund (after any tax and investment expenses), while maintaining an acceptable level of risk and protecting our customers. We also use our bonus process to smooth some of the highs and lows of investment performance.

Our With-Profits Fund invests in a wide range of assets, so it's less exposed to changes in the value of any particular type of asset. Of course, there could be times when all of the different types of assets in the Fund are either going up or down in value, depending on market conditions.

The value of your investment can go down as well as up, so you might not get back the amount you put in. For investments in the With-Profits Fund, the value of the plan depends on the profit the fund makes and how it's distributed.

What is smoothing? 

Our With-Profits Fund aims to smooth some of the highs and lows of short-term investment performance, to provide a more stable return.

We do this by holding back some of the investment returns in good years with the aim of using this to support bonus rates in the years where the investment returns are lower.

Smoothing can help protect against bad market conditions. However, it can’t stop the value of your plan reducing if investment returns have been low.

If you have a Unitised With-Profits Plan and take money out of the With-Profits Fund, we may adjust the value of your plan if the value of the underlying assets is less than the value of your plan including all bonuses. This adjustment is known as a Market Value Reduction (MVR).

Market Value Reduction (MVR)

An MVR is an amount we might deduct when money is withdrawn from the With-Profits Fund. We'd do this if the value of the underlying assets of the fund is less than the value of your plan (including bonuses).

An MVR ensures that planholders who take money out receive a return based on the performance of the fund over the period they were invested. It protects planholders who leave their money invested and is our way of being fair to all of our With-Profits investors.

MVR explanation guide

What are bonuses? 

Bonuses are how we share the fund’s profits with planholders. There are two types of bonuses: 
  • Regular Bonus: normally added throughout each year. We can change the rate of regular bonus at any time without prior notice. 
  • Final Bonus: may be paid when you take money out of your plan. Final bonus may vary and is not guaranteed. 

Our bonus plan aims to give each planholder a return which reflects the earnings on the underlying investments over the period of their investment, whilst smoothing some of the highs and lows of short-term investment performance.

We’re not recommending one product option over another. If you’re unsure which product is right for you, we recommend seeking financial advice.

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