PruFund range of funds – Expected Growth Rates and Unit Price Adjustments

The PruFund range of funds are invested in the Prudential's With-Profits Fund. The PruFund funds have an established smoothing process which aims to provide you with some protection from the extreme short-term ups and downs of the markets.

Our established smoothing process has two elements:

• Expected Growth Rates, which normally apply on a day-to-day basis.

• Unit Price Adjustments, which will be applied when the process requires us to do so.

Prudential set Expected Growth Rates (EGR); these are the annualised rates your investment would normally change in line with. The EGRs 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 investments into a PruFund will normally change on a daily basis in line with the relevant EGR.

The EGRs are reviewed every 3 months on the quarter date (25 February, 25 May, 25 August and 25 November or the next working day if the quarter date is a weekend or a public holiday) and may be higher, the same, or lower than they were at the start of your investment.

When you invest in one or more of the PruFund range of funds, your initial investment will purchase a number of units that you will hold in the fund or funds you choose to invest in. The initial price and number of units you purchase will depend on the unit price on the day you invest as well as the amount of money you invest with.

The Expected Growth Rates that are applied daily to the units that you hold within the fund or funds you choose will normally give you an indication of how your investment should increase over the quarter and are shown gross of all product charges including annual management charges.

Please note that they are not an indication of what you will get back over the long term as the value of your investment can go down as well as up and there is still the potential that you may not get back the amount you put in.

Although we use a long term view of performance to set EGRs, we also have to take into account the shorter-term performance. On a daily basis, if the shorter- term performance differs too much from our current Expected Growth Rate, we would have to amend the value of your fund up or down  to ensure we're not returning too much or too little. We call these Unit Price Adjustments.

We may decide to reset the smoothed price of a PruFund fund on a particular day, to protect the With-Profits Fund and those invested in it.

If we decide to reset, the smoothed price (also known as the unit price) of the affected fund would be adjusted to be the same value as the relevant unsmoothed price on that working day. That adjusted smoothed price would then continue to grow in line with the relevant Expected Growth Rate.

There may be occasions where we have to suspend the smoothing process for one or more PruFund funds for a period of consecutive days, to protect our With-Profits Fund and those invested in it. When this happens the smoothed price for the affected fund(s) is set to the unsmoothed price for each day until we reinstate the smoothing process.