M&G plc with-profits fund helps protect policyholders
From investment market volatility in 2020

23 February 2021

Around 2 million customers to share an expected total bonus of £2 billion

M&G plc today announced that the £87.3 billion With-Profits Fund1 of the Prudential Assurance Company, a wholly-owned subsidiary, returned 1.7% over the 12 months to the end of 2020.

On the basis of that performance, coupled with the financial strength of the overall fund built up over many decades, around 2 million savers are set to benefit from an expected total bonus of £2 billion. (For full details of the 2021 With-Profits Bonus Declaration, please visit our website).

When setting bonuses, Prudential aims to smooth some of the extreme highs and lows of investment performance by holding back some returns in good years to support bonus rates in years where returns are lower.

A history of strong performance

In what was a highly unusual year for global investment markets, the Fund returned a positive return of 1.7% in the 12 months to the end of 2020 before taxes and charges. This compares with a -11.5% return from the FTSE 100 Index2 over the same period, not allowing for any management fees. And over the 10 years to the end of 2020, returns on the same basis were 94.5% and 60.2% respectively. These results demonstrate the short and longer-term benefits of diversification and investing globally in a range of different asset types.

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