Prudential ISA

By selecting one or more funds that suits your appetite for risk, you can design an investment portfolio that could be just right for you. There are many funds you can invest in, covering a range of potential returns and levels of risk. By creating your own unique combination of funds you can aim to find a mix that you think you're comfortable with.

Please remember that the value of your investment may fluctuate and is therefore not guaranteed. You may not get back the full amount of your original investment.

Many of the funds spread their investments over several assets to try to limit your exposure to the ups and downs of investing solely in stocks and shares. If the value of one sector or type of asset such as stocks and shares goes down, there are others such as bonds that can potentially provide returns. This is sometimes known as multi-asset investing or diversification.

To read more about different types of assets and their risk levels click where to invest - balancing risk and potential reward.

Please note that the value of your investment may fluctuate and is therefore not guaranteed. You may not get back the full amount of your original investment.

Decide how much you want to invest in each fund.

Invest a lump sum from £500 to £10,200 (subject to your ISA allowance), or get started with a direct debit from as little as £50 a month.

Charge free withdrawals of £250 or more are allowed at any time, although please bear in mind that taking income or making withdrawals may affect the returns you get back on your investment.

You can top up an existing ISA up to the annual limit by either calling us free on 0800 072 6159 or using this top up form (the minimum lump sum is £250 and you can top up your monthly payment by multiples of £5). Please read the key features before topping up.

Transfer previous years' cash or stocks and shares ISAs without affecting the current year's limits with this transfer and authority form. Your current ISA Manager may charge you for any transfer. You may also lose out on any growth in value during the period where the transfer is taking place between your old ISA Manager and Prudential.

You can switch funds whenever you need to without charge. Note that charges may vary in the future.

It's true that putting money in shares and other assets is more risky than investing in cash, and events over 2008 and early 2009 have gone a long way to showing this. However, historically, over the medium to long term, the returns from shares have been better than cash.

According to the Office for National Statistics (Financial Statistics) Rates Shares and Deposits - Average Rates, from the launch of FTSE All-Share index in April 1962, to April 2010, shares have beaten cash in:

• 77.9% of all 5-year periods
• 91.9% of all 10-year periods

While many of the funds invest a share of their money in stocks and shares to try and take advantage of higher returns over the longer term most do not invest all of their money there. This is because by investing in other assets, such as bonds, cash and property, the funds are not solely exposed to significant price movements in any single asset. With this approach, rather like putting your eggs in several baskets, the funds aim to smooth your returns when markets are volatile.

There are some tax advantages to investing in stocks and shares within an ISA wrapper. Apart from the 10% tax credit applied to dividends, there is no additional income or capital gains tax liability, either within the ISA or for individuals. Please be aware that the impact of taxation (and any tax reliefs) depends on individual circumstances. Information about tax rules is based upon our current understanding, and is liable to change in the future.

Find out more about investments and taxation.

These risk rating categories have been developed by Prudential to help provide an indication of the potential level of risk and reward that is attributable to a fund based on the type of assets which may be held within the fund. Other companies may use different descriptions and as such these risk rating categories should not be considered as generic to the fund management industry.

Prudential will keep the risk rating categories under regular review and as such they may be subject to change in the future. We recommend therefore that before making any fund choice in the future you ensure you understand the appropriate risk rating before making a decision.

As with other investments in stocks and shares your investment may fluctuate and is not guaranteed. You may not get back the full amount of your original investment. If any income or withdrawals taken are more than any overall growth achieved the value of your investment will reduce below the level of original capital invested.

The Prudential (Invesco Perpetual) Managed Trust, Prudential (Newton) Managed Trust and Prudential (Newton) Higher Income Trust are Prudential funds, managed on its behalf by the fund management group stated. They should not be confused with the same or similar named funds or unit trusts offered independently by these fund management groups.

• Fact sheet
• Managers' Final Report
• Investment Fund Annual Report
• PIF Aggregate
• Managers' Interim Report

Full list of funds

Lower to Medium Risk
Prudential Cautious Managed Growth Fund
Prudential Managed Defensive Fund
Prudential Distribution Trust
Prudential Corporate Bond Trust
Prudential Cautious Growth Portfolio
Prudential Cautious Portfolio
Prudential Defensive Portfolio

Medium Risk
Prudential Managed Trust
Prudential Global Balanced Trust
Prudential Growth Trust
Prudential Managed Funds Tracker Trust
Prudential Balanced Portfolio

Medium to Higher Risk
Prudential International Growth Trust
Prudential Global Growth Trust
Prudential (Invesco Perpetual) Managed Trust
Prudential (Newton) Managed Trust
Prudential Adventurous Portfolio

Higher Risk
Prudential European Index Tracker Trust
Prudential European Trust
Prudential North American Trust
Prudential UK Index Tracker Trust
Prudential UK Growth Trust
Prudential Equity Income Trust
Prudential Japanese Trust
Prudential (Newton) Higher Income Trust
Prudential Ethical Trust
Prudential Small Companies Trust
Prudential Pacific Markets Trust

• Fact sheet
• Managers' Final Report
• Investment Fund Annual Report
• PIF Aggregate
• Managers' Interim Report