PruFund Range of Funds

The PruFund Range of Funds includes several funds that you can invest in through our different investment bonds. See the table below.

Please note that the value of your fund may fluctuate and you may not get back your original investment.

PruFund Smoothing - how does it work?

PruFund funds are invested in Prudential's With-Profit Fund and aim to provide more stable growth than you can expect from investing directly in the stock market. The PruFund Growth Fund and PruFund Cautious Fund have different investment aims and asset splits. The PruFund Protected Cautious Fund invests in the same assets as the PruFund Cautious Fund but includes a 5th anniversary guarantee for an additional charge.

These funds are designed to deliver smoothed growth by:

• Investing in many different investment areas, such as UK equities, Property, Fixed Interest, International equities and cash. By spreading your investment we can help to reduce the risk of your investment experiencing the extreme ups and downs of having all your eggs in one basket. Our investment specialists will look for the best opportunities for growth within these investment areas.
• Applying a unique smoothing formula. The formula has two elements:
• Expected Growth Rates which apply on a day to day basis; and
• Unit price adjustments, which will be applied when the formula requires us to do so.

What is the Expected Growth Rate (EGR)?

The EGR is the rate that is used to increase the value of your unit price each day.

The Expected Growth Rates are set quarterly by the Prudential Directors having regard to the expected long term returns of the fund.

We try to make sure that your investment grows as smoothly as possible and due to the long term nature of these rates, they often remain unchanged at the quarterly review.

The EGR gives you an indication of how your investment may perform over the quarter.

How do Expected Growth Rates affect my investment?

When you invest in PruFund, your investment will purchase a number of units dependent upon the unit price on the day you invest and the amount of your investment.

Your investment in PruFund will usually increase at the current Expected Growth Rate applicable to that fund. This increase will be reflected by increasing the unit prices daily.

How can unit price adjustments affect the value of my investment?

The aim is that your investment grows steadily over the medium to long term at the rate of the Expected Growth Rates.

However, when market conditions are volatile, an adjustment to the unit price may occur. A unit price adjustment will be applied when the performance of the fund moves too far away from the value of your investment based on the Expected Growth Rates. The smoothing formula we use ensures that the value of your investment increases as smoothly as possible but is never more than 10% away from the value of the underlying fund.

How would a 5% unit price adjustment affect an investment?

Suspension of smoothing

The smoothing formula aims to deliver more stable growth. However in order to protect the fund and its investors, there may be circumstances where we temporarily suspend smoothing.

If smoothing is suspended, it will be for a minimum of 30 days, and the unit price of your investment will change daily in line with the value of the underlying fund rather than in line with the Expected Growth Rate.

How do I access PruFund?

You can access PruFund through the following investment bonds;

• Flexible Investment Plan
• Prudential Investment Plan
• International Prudence Bond