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PruFunds aim to protect your clients from some of the short term ups and downs of direct stockmarket investments by using an established smoothing mechanism and globally diversified multi-asset portfolios.
PruFunds diverse asset allocation spreads risk across different asset classes and geographical locations and across public and private markets.
Please remember that the value of investments can go down as well as up, your client may not get back what they have paid in.
Choice
There's a choice of 12 PruFunds offering varying levels of risk and return potential. Through each of the fund links below you'll find all the information you'll need such as:
- Performance updates and factsheets
- Client guides
- Risk ratings
Access
The PruFund range is accessible through a variety of packaged retirement and investment products and the M&G Wealth Platform. See individual funds for more details.
PruFund funds are invested in the Prudential With-Profits Fund, which is one of the largest and financially strongest with-profits funds in the UK. See the Principles and Practices of Financial Management (PPFM) that are applied in the management of our With-Profits funds.
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How do PruFunds work?
Whether your client is approaching retirement or looking to produce an income, PruFunds aim to grow your clients money over the medium to long-term (at least 5-10 years) by utilising two of its main characteristics:
Portfolio Management
Our PruFund range of multi-asset funds are actively managed by our investment experts – who focus on strategic asset allocation and underlying manager selection.
Smoothing – steady and stable
PruFund's smoothing mechanism can help to protect investments from the impact of short-term market volatility. Helping to deliver steady and stable growth potential plus a smoothed investment experience for clients.
- Investment Philosophy
- How is PruFund invested?
- Smoothing
The M&G Treasury & Investment Office (T&IO), are our investment experts. They are a team of around 60 people with specialist expertise in asset allocation, portfolio management and manager research. Their primary focus is asset allocation and their process has been in place for nearly 20 years.
T&IO's Investment Manager Oversight team are responsible for selecting and monitoring the continued suitability of the underlying managers and assess whether the mandates and funds are performing in line with expectations.
Their investment philosophy applies these core principles:
- Active portfolio management, generates return from a number of sources.
- Risk appetite, ensuring each fund has an appropriate risk/return profile.
- Diversification, across asset classes and geographies that continue to evolve as markets and opportunities develop.
- Long-term-approach to investing, over a 5-10 year investment horizon that looks through short term volatility. T&IO are fundamentally 'buy and hold' investors.
- ESG principles and beliefs are integrated into investment decisions.
- Valuation, T&IO will always take a forward-looking view of what assets represent best value.
Creating value over the long-term
T&IO are fundamentally ‘buy and hold’ investors. New investments and asset classes will likely feature in portfolios for many years once added, albeit the amount of exposure may vary over time.
Discover how the T&IO Long Term Investment Strategy team leverage resources available to them to create value over the long term in this short video.
PruFunds are long-term investments (at least 5-10 years). Their approach relies on assessing the long-term potential returns from a broad range of asset classes and seeks to deliver relatively stable returns across a range of market environments.
T&IO build a view on expected cash returns, inflation and government bond returns for each region/country. They then add a ‘risk premium’ which is effectively an element of extra return investors can expect to receive to compensate them for taking on extra risk.
Asset allocation is a primary focus for T&IO and the resource they apply to it is just one of the differentiators we believe sets them apart.
Asset class insights
Each individual PruFund invests in a spread of different types of asset classes across the globe. The five main asset classes are Equities, Property, Bonds (Corporate and Government), Alternatives and Cash. By spreading the investment across these asset classes, the volatility and risk associated with investing in a single asset can be reduced.
PruFund has access to a wide range of underlying investments, including some which individual investors may not be able to access directly. Take a closer look with your clients at some of the investments held in PruFund:
Where your customers are invested
This short client facing video demonstrates where PruFund customers are invested across the world and the underlying assets that aim to spread risk and diversify investment growth.
Our PruFund funds offer growth potential and a smoothed investment journey by using an established smoothing mechanism which can help to protect your client's from the impact of short term market volatility.
To achieve smoothing PruFund funds use Expected Growth Rates (EGRs) and where required, Unit Price Adjustments (UPAs). EGRs and UPAs are both part of the smoothing process.
| The Smoothed Value is normally used for customer transactions, rather than the more volatile Unsmoothed Value. |
| In this chart, the Smoothed Value increases in line with the fund's Expected Growth Rate. |
The Expected Growth Rates (EGR's) are set quarterly, and reflect our view of how we think each PruFund fund will perform over the long-term (up to 15 years). Each PruFund fund has its own EGR and your clients investment into a PruFund will normally grow daily in line with the relevant EGR.
We do also have to take into account short term performance. This is where UPAs may be used. UPAs allow us to make any necessary adjustments to help keep the fund growth on track and in line with the current EGR.
There may be occasions where the smoothing process is suspended for one or more PruFund funds for a period of consecutive days, to protect the With-Profits fund and the clients invested in it.
Other helpful resources
PruFund explained
The PruFund explained client video provides more information on how the fund works, including smoothing.
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"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at 5 Central Way, Kildean Business Park, Stirling, FK8 1FT. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company Limited. The Prudential Assurance Company Limited and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc which is a holding company registered in England and Wales with registered number 11444019 and registered office at 10 Fenchurch Avenue, London EC3M 5AG, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.