For UK financial advisers only, not approved for use by retail customers

PruFund Planet – a smoothed investment experience

PruFund Planet is actively managed by M&G Treasury and Investment Office (T&IO), Pru’s team of in-house investment experts.

The fund range is designed to deliver a smoothed investment experience for clients whilst aiming to create both competitive returns and positive outcomes. The funds benefit from Pru’s established smoothing process, which is used to help balance out extreme short-term market volatility and deliver steady returns over the long-term (up to 15 years).

This means that clients can have some peace of mind of smoothed returns, according to a long-standing approach, while knowing they’re also doing some good for the planet and society too.

PruFund Planet is aiming to generate differentiated investment outcomes to the existing PruFunds. Whilst it features a very similar asset allocation at the broad asset class level, it will predominantly invest in underlying funds that are not present in the existing PruFund ranges.

To achieve smoothing, PruFund Planet funds use Expected Growth Rates (EGRs) and, where required, Unit Price Adjustments (UPAs).

Expected Growth Rates (EGRs) –this is a forward-looking projection, which reflects the view of how Pru thinks that each PruFund fund will perform over the medium to long-term (up to 15 years). They are reviewed every 3 months, when they could change, up or down.

They also have to take into account shorter-term performance, which means they will continually monitor the underlying fund performance and make adjustments to the fund value, up or down, when necessary. These are known as Unit Price Adjustments (UPAs).

 

Example of smoothing in practice

Pru may decide to reset the smoothed price of a PruFund fund on a particular day, to protect their  With-Profits Fund.

If they decide to reset, the smoothed price of the affected fund would be adjusted to be the same    value as the unsmoothed price on that working day. That adjusted smoothed price will then               continue to grow in line with the Expected Growth Rate from the working day after this reset of the smoothed price. This is referred to as a Unit Price Reset in Pru’s literature.

There may be occasions where Pru has to suspend the smoothing process for one or more PruFund funds for a period of consecutive days to protect the With-Profits Fund. 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.

 

To find out more about PruFund Planet, click here

 

The value of any investment can go down as well as up so your clients might get back less than they paid in. Past performance is not a guide to future performance.

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