Please see below for Prudential’s latest announcement regarding Unit Price Adjustments for the PruFund range of funds, received by us late yesterday 25/05/2021:
At this quarter’s review, we’ve announced no change to the Expected Growth Rates (EGR) and upward Unit Price Adjustments (UPA) to a number of the PruFund range of funds this quarter end.
PruFund UPA announcement
Today we’ve announced there’s upward UPAs to the following PruFund funds:
| Fund | UPA applied |
| Prudential Investment Plan | |
| PruFund Growth Fund | +3.56% |
| PruFund Risk Managed 4 Fund | +5.33% |
| PruFund Risk Managed 5 Fund | +3.67% |
| Trustee Investment Plan | |
| PruFund Cautious Pension/ISA Fund | +2.00% |
| PruFund Growth Pension/ISA Fund | +3.91% |
| PruFund Risk Managed 2 Pension/ISA Fund | +2.09% |
| PruFund Risk Managed 3 Pension/ISA Fund | +3.22% |
| PruFund Risk Managed 4 Pension/ISA Fund | +2.67% |
| Prudential ISA | |
| PruFund Cautious Pension/ISA Fund | +2.00% |
| PruFund Growth Pension/ISA Fund | +3.91% |
| PruFund Risk Managed 2 Pension/ISA Fund | +2.09% |
| PruFund Risk Managed 3 Pension/ISA Fund | +3.22% |
| PruFund Risk Managed 4 Pension/ISA Fund | +2.67% |
| PruFund Risk Managed 5 Pension/ISA Fund | +3.45% |
| Prudential Retirement Account – Series D | |
| PruFund Cautious Pension Fund – Series D | +2.00% |
| PruFund Growth Pension Fund – Series D | +3.91% |
| PruFund Risk Managed 2 Pension Fund – Series D | +2.09% |
| PruFund Risk Managed 3 Pension Fund – Series D | +3.22% |
| PruFund Risk Managed 4 Pension Fund – Series D | +2.67% |
| Flexible Retirement Plan | |
| PruFund Cautious Pension/ISA Fund | +2.00% |
| PruFund Growth Pension/ISA Fund | +3.91% |
| PruFund Risk Managed 2 Pension/ISA Fund | +2.09% |
| PruFund Risk Managed 3 Pension/ISA Fund | +3.22% |
| PruFund Risk Managed 4 Pension/ISA Fund | +2.67% |
| International Prudence Bond / Prudential International Investment Bond | |
| PruFund Cautious (Sterling) Fund | +2.00% |
| PruFund Growth (Sterling) Fund | +2.88% |
| PruFund Growth (Dollar) Fund | +2.95% |
| PruFund Growth (Euro) Fund | +2.68% |
Please note UPAs also apply to the protected versions of the fund where applicable.
On the monthly PruFund Investment Date, a UPA is applied if the unsmoothed price is:
- 4%, or more, higher than the smoothed price, for our PruFund Cautious, PruFund Risk Managed 1 or PruFund Risk Managed 2 funds, or
- 5%, or more, higher than the smoothed price for our PruFund Growth, PruFund Risk Managed 3, PruFund Risk Managed 4 or PruFund Risk Managed 5 funds.
Growth rates aren’t guaranteed. The value of an investment can go down as well as up. Your client may get back less than they have paid in.
More information on the EGRs and UPAs for each product is available on PruAdviser.
Prudential have said that they have had a strong 6 month performance since the 25th November last year. It’s important to note that PruFund funds lag both a rising and a falling market. The increases or reductions in PruFund via UPAs are formulaic and non-discretionary. They are based on the maths and the difference in fund value between the underlying assets and the ‘smoothed’ price.
M & G’s Treasury & Investment Office (TIO) who manage PruFund for Prudential are in the middle of a Strategic Asset Allocation review. Within the next month or two we will find out how they change their assets focusing on long term returns.
The Expected Growth Rates (EGRs) have remained the same. For example on PruFund Growth 5.70% gross per annum. EGRs give you an indication of what the TIO think long term returns will be over 15 years plus.
These upwards Unit Price Adjustments are some very positive news and demonstrate the recovery in the markets as a whole. These UPAs combined with previous UPAs over the past 12 months have brought the majority of the PruFund range of funds back to positions similar to those before the drops caused by the Coronavirus Pandemic.
Hopefully this trend of recovery and positive performance continues as we see mass vaccine rollouts worldwide and lockdown restrictions gradually eased. Although we may not be out of the woods yet and there are no guarantees, this increase in the UPAs is a reason for optimism.
Take care.
Paul Green DipFA
26/05/2021