Composite benchmark news

Benchmark news October 2021

We’ve found an error in the benchmark information contained in our fund reporting material (for example online fund factsheets) for the funds listed below.

The composite benchmark information was out of date for the listed funds and dates, but it didn’t impact fund performance. The actual performance information shown on the factsheets was and continues to be accurate.

If you didn’t refer to fund reporting material during the given time period, then there’s no impact to you.

If you referred to our fund reporting material, including online fund factsheets between the dates above, you may have used that information to make decisions about your investments. There are a number of other factors you may have also used to make those decisions, including the risk rating of the fund, asset allocation, type of holdings, past fund performance and the composite benchmark information.

We’ve contacted customers who were invested in one or more of the funds during the timeframes, based on the following:

  • Customers who were auto enrolled into a scheme, and have contributed into one or more of these impacted funds. They may have chosen to invest in a scheme default option or may have self-selected the fund(s).
  • Customers who made a transfer into one of the impacted funds - where they may have chosen to invest in a scheme default option or self-selected one of the funds.
  • Customers who switched in or out of a listed fund by submitting a one-off switch request.
  • Customers who have been moved into one or more of these impacted funds, as a result of the closure of another fund that they were invested in.

Benchmarks provide a comparison of fund performance against relevant market indicators, for example those that track the performance of the UK’s largest companies or other markets around the world, or similar funds.

A range of selected indices from a number of companies were used to create composite benchmarks for these funds.

Benchmarks shouldn’t be confused with the past performance figures on factsheets – these are the actual performance figures for the fund. All of the performance figures on the impacted fund factsheets are correct and were not impacted by this error.

This will depend on a number of factors including the actual fund, when you looked at the fund information and the timeframe you were interested in. All these factors will give you a different result. 

Here’s an example of the differences for the Prudential Dynamic Growth IV S3 fund.

  1 year return compared on quarterly basis 3 year return compared on a quarterly basis and annualised 5 year return compared on a quarterly basis and annualised

Smallest difference

0.0% 0.0% -0.3%
Largest difference -2.1% -0.9% -0.5%

 

Examples of the largest differences over specific timeframes

  1 year return to 31 Mar 2020 3 year return to 30 Jun 2020 annualised 5 year return to 30 Sep 2020 annualised

Fund performance

-9.3% 3.7% 8.8%
Benchmark quoted at the time -7.7% 3.1% 6.8%
Revised estimate of the benchmark -5.6% 4.0% 7.3%
Difference -2.1% -0.9% -0.5%


Past performance isn’t a guide to future performance. The figures shown are intended only to demonstrate performance history of the fund, after allowing for the impact of fund charges and further costs, but take no account of any Annual Management Charge paid for by the deduction of units. Charges and further costs may vary in the future and may be higher than they are now. Fund performance is based upon the movement of the daily price and is shown as total return with gross income reinvested. The value of your investment can go down as well as up so you might get back less than you put in.

We’ve removed the composite benchmark information that we previously used, from these fund factsheets and we’ve temporarily replaced it with Association of British Insurers (ABI) Fund Sector information.

We’re currently developing a new simplified approach to provide composite benchmark information for funds. We’re working with different index providers to ensure we have a robust process in place to update and maintain composite benchmarks. Until we’re ready to implement this, we’ll continue to use the ABI Fund Sector information for these funds.

We’ll update this site when we’re able to announce the return of composite benchmarks to these fund factsheets.

Yes, the following funds were not impacted by the composite benchmarks issue, but we’ve updated the factsheets so they are currently using the ABI sector averages. This is temporary while we work on our simplified approach to providing composite benchmarks.

We’ll update this site when we’re able to announce the return of composite benchmarks to these funds.

The ABI Fund Sectors provide a system for classifying unit-linked life and pension funds that have investment strategies that are alike. They provide a list of defined fund categories that are referred to as ‘sectors’.

The sectors group together funds that are similar, so they are able to be compared on a like for like basis – but don’t reflect the relative risk of the funds.

Fund Names Series 1 Series 3 ABI Sector Definition
Prudential Dynamic Growth I n/a Yes

ABI Mixed Investment 0-35% Shares

Funds in this sector are required to have a range of different investments. Up to 35% of the fund can be invested in company shares (equities). At least 45% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or “cash” investments. “Cash” can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
  • Maximum 35% equity exposure (including convertibles)
  • No minimum equity requirement
  • Minimum 45% investment grade fixed income and cash
  • Minimum 80% investment in established market currencies (US Dollar, Sterling & Euro) of which 40% must be Sterling
  • Sterling requirement includes assets hedged back to Sterling

Prudential Dynamic Growth II

n/a Yes ABI Mixed Investment 20-60% Shares Funds in this sector are required to have a range of different investments. The fund must have between 20% and 60% invested in company shares (equities). At least 30% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or “cash” investments. “Cash” can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
  • Minimum 20% equity exposure
  • Minimum 30% fixed income and cash
  • Minimum 60% investment in established market currencies (US Dollar, Sterling & Euro) of which 30% must be Sterling
  • Sterling requirement includes assets hedged back to Sterling
Prudential Dynamic Growth III n/a Yes ABI Mixed Investment 20-60% Shares Funds in this sector are required to have a range of different investments. The fund must have between 20% and 60% invested in company shares (equities). At least 30% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or “cash” investments. “Cash” can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
  • Minimum 20% equity exposure
  • Minimum 30% fixed income and cash
  • Minimum 60% investment in established market currencies (US Dollar, Sterling & Euro) of which 30% must be Sterling
  • Sterling requirement includes assets hedged back to Sterling
Prudential Dynamic Growth IV n/a Yes ABI Mixed Investment 40-85% Shares

Funds in this sector are required to have a range of different investments. However, there is scope for funds to have a high proportion in company shares (equities). The fund must have between 40% and 85% invested in company shares.

  • Maximum 85% equity exposure (including convertibles)
  • Minimum 40% equity exposure
  • No minimum fixed income or cash requirement
  • Minimum 50% investment in established market currencies (US Dollar, Sterling & Euro) of which 25% must be Sterling
  • Sterling requirement includes assets hedged back to Sterling
Prudential Dynamic Growth V n/a Yes ABI Flexible Investment 

The funds in this sector are expected to have a range of different investments. However, the fund manager has significant flexibility over what to invest in. There is no minimum or maximum requirement for investment in company shares (equities) and there is scope for funds to have a high proportion of shares. The manager is accorded a significant degree of discretion over asset allocation and is allowed to invest up to 100% in equities at their discretion.

  • No minimum equity requirement
  • No minimum fixed income or cash requirement
  • No minimum currency requirement
  • Notes to definitions
Prudential Discretionary Yes Yes ABI Mixed Investment 40-85% Shares

Funds in this sector are required to have a range of different investments. However, there is scope for funds to have a high proportion in company shares (equities). The fund must have between 40% and 85% invested in company shares.

  • Maximum 85% equity exposure (including convertibles)
  • Minimum 40% equity exposure
  • No minimum fixed income or cash requirement
  • Minimum 50% investment in established market currencies (US Dollar, Sterling & Euro) of which 25% must be Sterling
  • Sterling requirement includes assets hedged back to Sterling
Prudential Global Equity Yes Yes ABI Global Equities 
  • Funds which invest at least 80% of their assets in equities.
  • Funds must be invested in more than one equity region.
  • Not to include funds which would otherwise qualify for the Global Emerging Markets Equity Sector
Prudential Long-Term Growth Passive No Yes ABI Global Equities 
  • Funds which invest at least 80% of their assets in equities.
  • Funds must be invested in more than one equity region.
  • Not to include funds which would otherwise qualify for the Global Emerging Markets Equity sector
Prudential Dynamic Global Equity Passive No Yes ABI Global Equities 
  • Funds which invest at least 80% of their assets in equities.
  • Funds must be invested in more than one equity region.
  • Not to include funds which would otherwise qualify for the Global Emerging Markets Equity sector
Prudential International Equity Yes Yes ABI Global Equities
  • Funds which invest at least 80% of their assets in equities.
  • Funds must be invested in more than one equity region.
  • Not to include funds which would otherwise qualify for the Global Emerging Markets Equity sector
Prudential Overseas Equity Passive No Yes ABI Global Equities
  • Funds which invest at least 80% of their assets in equities.
  • Funds must be invested in more than one equity region.
  • Not to include funds which would otherwise qualify for the Global Emerging Markets Equity sector

If you want to get in touch

If you’re concerned that you might have been impacted by this then please contact us. 

Please provide us with information about your specific circumstances, for example which fund(s) you were invested in, when you referred to the composite benchmark information, what type of document you referred to and where you got it from. We’ll also need to know about the decision you made or you would have made based on the information you reviewed. 

Write to us using secure mail at pru.co.uk/prumail

Send us a letter to Prudential, Lancing BN15 8GB

To speak to us, use the policy number look up to find the right contact phone number.

Or call our general enquiries line 0800 000 000 between 8am and 6pm Monday to Friday (GMT) or +44 1786 448844 if you're calling from outside the UK.