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Prudential With-Profits Fund, performs well despite challenging investment markets.

In 2022, our globally diversified With-Profits Fund was able to perform very effectively in extremely challenging investment markets and provide some protection to our investors. A small negative return of -1.5% (gross) was achieved in an environment where many major equity and bond markets suffered double digit losses. Over the 10 years to the end of 2022, returns on the same basis were 90.2%.

2022 was a turbulent year for investment markets, driven by:

  • Geopolitical issues including the situation in Ukraine
  • Global inflation concerns, central bank activity and rising interest rates 
  • The ongoing impact of COVID-19, particularly in China
  • Additional volatility in the UK, driven by political uncertainty.

Our With-Profits Fund invests in a wide range of globally diversified assets so was able to capture positive returns in some places and avoid the worst of market falls in others. The Fund’s performance has added to its already strong longer term record, relative to its peers.

In 2023, the team will continue to take decisions that allow them to manage the Fund prudently. We’ll 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’ll also continue to implement Environmental Social and Governance (ESG) considerations into everything we do, from asset allocation to fund manager selection.    

The value of any investment can go down as well as up so your customer might not get back the amount they put in. Past performance is not a reliable indicator of future performance.

What the Fund is invested in

Our With-Profits Fund invests in a globally diversified portfolio of assets so captured positive returns from a wide range of underlying investments. The investment teams will continue to source and invest in assets that build diversification.

Asset %
UK Equities (listed) 16.0
Overseas Equities (listed) 29.8
Property 14.1
Alternative Assets 12.1
Corporate Bonds 22.7
Cash & Receivables 5.3
Total 100

as at 31 December 2022

Jack Daniels, Chief Investment Officer, M&G plc, said: “Whilst 2022 was a challenging year for the Prudential With-Profits Fund, it performed well relative to peers. The global diversification again proved to be beneficial. While developed market fixed income and many regional equity portfolios produced negative returns, there was better news in our Asian, Indian and African equity mandates. Our real assets also fared well with real estate and alternative investments being positive contributors in aggregate. We also had strong returns from Tactical Asset Allocation during volatile markets.

Our prudent, long-term investment approach continues to provide positive returns to customers whilst protecting them from short-term volatility, such as we witnessed in 2022.

Our approach to setting bonuses allows us to continue to manage the Fund to secure the highest total return while maintaining an acceptable level of risk.

The Prudential With-Profits Fund is one of the largest and financially strongest in the UK. This allows us to be long-term investors in a very wide range of assets and individual companies. We will continue to monitor markets and seek new investment opportunities to further enhance the global diversification of the Fund” 

More information on the 2023 With-Profits Bonus Declaration is available here