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Please see below details relating to the unique event impacting Prudential’s ‘smoothed’ funds.

The Pru PruFund ‘smoothed’ range of funds have been in existence since 2004 in an investment product.  Late yesterday afternoon, for the first time in c 17 years, Prudential announced a Unit Price Reset (UPR).  This is an increase in fund value in this case.

It looks similar to a Unit Price Adjustment (UPA) and is also a part of the ‘smoothing’ mechanism for PruFund funds.  If you look in their guide to the smoothing process, you can see it mentioned on the bottom of page 3;

https://www.pruadviser.co.uk/pdf/PRUF1098101.pdf?utm_term=PruFund%20Quarterly%20EGR%20&utm_campaign=PruFund%20&utm_content=email&utm_source=Act-On+Software&utm_medium=email&cm_mmc=Act-On%20Software-_-email-_-Latest%20EGRs%20and%20UPRs%20for%20the%20PruFund%20range%20of%20funds-_-guide%20to%20the%20smoothing%20process

Why is this happening now?

We have been through an unprecedented time in 2020 with the sharpest and quickest falls in markets and then subsequent recoveries.  The underlying fund performance has been strong since March 2020 and this UFR ensures that this is fully delivered to you.  To quote the Pru ‘It’s being done because it’s the right thing to do for all policyholders.’

It’s about treating customers fairly, in this case for clients like you in the Pru’s ‘smoothed’ funds.  Unusual circumstances can require unfamiliar solutions – all subject to a rigorous framework and governance and overseen by a specialist actuary, a specialist committee and signed off by the Prudential Assurance Company board.

How does impact on me?  The following UPRs have been announced:

ProductFundUnit Price Reset
Flexible Retirement PlanPruFund Growth+5.66%
Flexible Retirement PlanPruFund Risk Managed 4+4.56%
Trustee Investment PlanPruFund Growth+5.66%
Prudential ISAPruFund Growth+5.66%
Retirement AccountPruFund Growth Series D+5.66%
Retirement AccountPruFund Risk Managed 4 Series D+4.56%
Retirement AccountPruFund Growth Series E+3.63%
Retirement AccountPruFund Risk Managed 4 Series E+3.69%
Retirement AccountPruFund Risk Managed 5 Series E+5.02%

The difference in the UPRs is based on the current position, for example, if UPAs have been applied more frequently, as is the case with Series E funds.  It is also based on your risk profile, different funds such as the Risk Managed 4 and 5 funds have a different risk profile.

The only funds that have not been affected by this UPR is the brand-new range of smoothed funds, the five funds that are PruFund Planet.  I’ve outlined the main funds in the table above that affect our clients. It’s nice to get some good news at the moment, hopefully this will add to your enjoyment of the Bank Holiday weekend!

Steve Speed

26/08/2021