Yesterday afternoon Prudential announced ‘upwards’ Unit Price Adjustments, details cut and pasted as follows:
PruFund Series E fund announcement
Today we announced there’s six upward UPAs for the Series E PruFund range of funds at this month’s PruFund Investment Date.
| Fund | UPA applied |
| Prudential PruFund Growth Pension – Retirement Account Series E | +3.18% |
| Prudential PruFund Cautious Pension – Retirement Account Series E | +2.16% |
| Prudential PruFund Risk Managed 2 – Retirement Account Series E | +2.24% |
| Prudential PruFund Risk Managed 3 – Retirement Account Series E | +2.93% |
| Prudential PruFund Risk Managed 4 – Retirement Account Series E | +3.41% |
| Prudential PruFund Risk Managed 5 – Retirement Account Series E | +3.97% |
This is good news and I had hoped for this following positive recent developments for markets, the US election outcome, the last-minute Brexit trade deal and the approval of vaccines and the start of distribution and vaccination.
President Biden has laid out his plans, revoked quite a few of Trump’s policies and appears to be on a mission to change the USA. This should help the world and global trade although the USA will still be struggling with China and trade with them, but relationships should be more diplomatic. President Biden is after all, a career public servant.
A cautionary note, whilst we still have headwinds in the market, (the end of furlough, rising unemployment and business failure in the UK to name a few), markets are still volatile as the vaccine battles the virus and economies struggle to build momentum, we could see further UPAs down as well as up. However, over the long term I would expect returns to be reasonable and for all PruFund investors to benefit from a truly diversified multi asset approach. This is what we need when asset values over the next decade in ‘standard’ investment assets are forecast to be lower for longer.
J. P. Morgan’s Long Term Capital Markets Assumptions Report for 2021 (25th anniversary edition) details the lower longer term returns from standard asset classes. Multi Asset diversification will be key. Prudential have long term experience in this area of fund management and have the scale, expertise and leverage to access non standard higher returning assets that will help sustain higher returns than standard portfolios of assets will offer at a similar risk profile over the long term.
As ever, our key advice is for you to remain invested, we are not out of the woods yet, but things look a lot brighter in comparison to just a few months ago. Funding investments now whether it is on a single/ad-hoc basis or on a regular monthly basis should be good value over the long term too.
Please see below the ‘A step-by-step guide to the PruFund smoothing process’, which aims to show the long-term characteristics and how the PruFund series of funds function:
https://www.pruadviser.co.uk/pdf/PRUF1098101.pdf
Please take care of yourselves and stay out of trouble until the vaccination program helps make the UK and the world a safer place again.
Carl Mitchell – Dip PFS
IFA & Paraplanner
26/01/2021