Our With-Profits Fund was the largest in the UK, worth around £72.2 billion as at 31 December 2013, after allowing for the impact of the transfer of the Hong Kong business.
What is a with-profits fund?
A with-profits fund is a pooled investment where your premiums are added together with those of other investors.
With-profits funds aim to smooth some of the short term highs and lows of the fund over the period of time that you hold the plan. So, you should see a steadier return year on year, rather than watching the value of your plan fully reflect the rise and fall in markets.
Please note that the value of an investment may fluctuate and is therefore not guaranteed. You may not get back the full amount of your original investment. For investments in with-profits funds, the value of the policy depends on how much profit the funds make and how it's distributed.
What does the Prudential With-Profits Fund invest in?
Prudential's With-Profits Fund is invested across a broad mix of assets both in the UK and abroad. The assets include company shares, property, fixed interest securities, and deposits.
What are bonuses?Bonuses are the way we allocate your share of the profits of the fund. There are two types of bonuses:
- Regular bonuses, which are normally added throughout each year. We can change the rate of regular bonus at any time without prior notice.
- Final bonus, which may be paid when you take money out of your plan. Final bonus may vary and is not guaranteed.
The company's bonus policy aims to give each planholder a return which reflects the earnings on the underlying investments, whilst smoothing the peaks and troughs of investment performance.
What is smoothing?
The With-Profits Fund aims to smooth some of the extreme ups and downs of short-term investment performance in order to provide a more stable return. We do this by holding back some of the investment returns in good years with the aim of using this to support bonus rates in the years where the investment returns are lower.
Smoothing offers some protection against bad market conditions. However, bear in mind that smoothing will not stop the value of your plan reducing if investment returns have been low.
A Market Value Reduction may be applied on withdrawal from the With-Profits Fund - please refer to specific product literature for further details or to find out more about how we manage our With-Profits Fund read our Principles and Practices of Financial Management.
How do I access Prudential's With-Profits Fund?
You can access Prudential's With-Profits Fund through the following: