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What sets our investment approach apart

M&G Treasury & Investment Office (T&IO's) performance is achieved through their development of a robust investment process, distinct from other providers.

  • Long-term approach to investing
  • Global diversification
  • Active fund management

We strongly believe that client outcomes will always be best served by:

  • A long-term approach to investing, avoiding fads and trends.

  • Diversification of asset classes and geography, reducing risk and volatility.

  • Active fund management, responding to market changes when they occur and ensuring portfolios don’t become imbalanced over time.

  • Frequent and consistent asset valuation, identifying opportunities and optimising allocation.

Prudential's financial strength as part of M&G plc, provides T&IO with the ability to take advantage of the risk premiums to hold illiquid assets, accessing a wide range of asset classes and more accurately assess an investment’s future value over the long term.

An investment process shaped by six key activities

Strategic Asset Allocation (SAA)

The selection of the optimal SAA for funds has a critical impact on investment outcomes. This area:

  • Is core to the investment approach

  • Does the in-house modelling and capital market assumptions through our bespoke proprietary model GeneSIS - developed and maintained in house, giving us the flexibility to tailor it to wider business needs

  • Is forward looking – diversification is key

  • Has over £176bn AUM*

Tactical Asset Allocation (TAA)

TAA reflects shorter term views in portfolios. Run in parallel with SAA, it ensures Prudential funds are able to respond accurately to short-term market movements and take advantage of mispricing opportunities. This area has:

  • Portfolio managers responsible within collectives**

  • M&G macro team responsible for TAA in PruFunds***

  • A framework in place across all multi asset portfolios

Portfolio Management

We believe daily monitoring is essential in ensuring a portfolio is managed and adjusted efficiently in line with target exposures, while simultaneously minimising cost and risk. We believe it is at the centre of all investment activity.

The Portfolio Management team:

  • Allocate investments in line with strategic asset allocation strategy

  • Carry out daily portfolio monitoring

  • Ensure all ongoing portfolio changes are implemented efficiently

Manager Oversight

We embed specialism at every stage of the investment process. Our specialist T&IO Manager Oversight team complements the skills of our fund managers, providing them with direction and insight into their fund’s underlying assets. This area has a:

  • Robust selection/oversight process

  • PruFund mandate design that can enhance returns

  • Key source of market views from underlying managers

  • Ability to seed new investment strategies

Risk Management

  • Three lines of defence model

  • Embedded at all stages of the investment process

  • All portfolios formally stress tested quarterly

  • Credit risk, market risk, liquidity risk, investment risk, regulatory risk and performance risk.

ESG Integration

  • Considered across all investment decisions

  • Asset allocation, mandate design, manager selection and oversight

  • Underlying managers look to drive investment into companies with sustainable business models

  • Exclusion of companies where appropriate

* T&IO Assets under management as at 30 June 2021. ** M&G Investment Management Ltd are the investment managers for the LF Prudential Risk Managed Active and Risk Managed Passive Funds. They make the relevant adjustments to the portfolios based on T&IO recommendations. *** The M&G Macro Investment Business runs the tactical asset allocation for the PruFund range of funds.

A seamless investment process

Latest T&IO updates

T&IO Weekly Market Updates

The M&G Treasury and Investment Office look at the latest developments in investment markets with their weekly investment commentary and podcast.

LF Prudential Risk Managed Active & Passive Strategic Asset Allocation Review 2021

The 2021 review continues the theme of evolving portfolios to capture new asset classes, future growth opportunities and sources of more attractive returns from fixed income markets.

 

Prudential Market Insights Update – November 2021

M&G Treasury and Investment Office discuss how M&G are incorporating ESG into their investment strategies, the latest data on inflation and its drivers, and the results of Q3 earnings.