Prudential confirms PruFund Expected Growth Rates

02 June 2015

  • Funds under management increased by £1 billion in Q1 2015 to £12.6 billion
  • Expected Growth Rates unveiled:
    • PruFund Growth Life fund confirmed at 6.0 per cent and
    • PruFund Growth Pension fund confirmed at 7.3 per cent

Prudential has confirmed Expected Growth Rates (EGR) of 6.0 per cent and 7.3 per cent will apply to its flagship PruFund Growth Life and PruFund Growth Pension funds respectively, for the three months to 24 August 2015, as record inflows to its with-profits range continue.

PruFund saw assets under management increase by 27 per cent to £11.6 billion last year and by another nine per cent since the beginning of 2015 to £12.6 billion.

Confirmation of the EGR, which is set quarterly to give customers and their advisers clear guidance on projected future returns, highlights the growing case for continued with-profits investment as part of a balanced investment portfolio. The EGR is based on the asset allocation of the relevant PruFund and Prudential’s expectations of long-term returns from the major asset classes.

John Warburton, executive director of distribution at Prudential UK, said: “We anticipate strong demand for our multi-asset proposition to continue and strong growth is being seen right across our entire with-profits product portfolio. Driven by pension reform, we’ve seen the appeal of with-profits increase among our pension and income drawdown customers who have been attracted by the benefits of a smoothed return to help manage market volatility and our strong track record of investment growth. In the first quarter of 2015 our retail life sales increased by eight per cent due to the growing popularity of PruFund-backed product wrappers such as drawdown, pensions and bonds.

“Advisers tell us their clients are making increased use of risk reduction and other strategies to address portfolio construction resulting in many now placing PruFund at the centre of such investment decisions.”

Since launch in September 2004, a £30,000 initial investment in the PruFund Growth Fund has increased to £52,7561 – an increase of just over 75 per cent.

John Warburton continued, “Prudential has built its investment strength on its ability to manage multi-asset funds, proven by the management of our with-profits fund which is one of the largest and financially strong funds in the UK today. The fund size and strength enables us to invest in a very wide range of asset types and thousands of individual companies.”

Using the traditions and strengths of its £76.7 billion2 with-profits fund, Prudential has developed a range of multi-asset funds, some of these funds are called the PruFund range of funds, which have been designed to suit different attitudes to risk by varying levels of equity exposure across the fund range.

PruFunds are available across many of Prudential’s product wrappers including its Flexible Retirement Plan; Flexible Retirement Plan (Income Drawdown); Onshore Bonds – Prudential Investment Plan; Offshore Bonds – Prudential International Investment Bond; ISA savings – Prudential ISA; and for SIPP/SSAS clients – Trustee Investment Plan.

PruFund funds are designed to deliver smoothed investment returns using Expected Growth Rates (EGRs). These are the annualised rates which will be applied daily to increase the unit price of the fund.

Media contacts

Louise Bryans

020 7004 8280

Darragh Leeson

020 7004 8081

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