PruFund optimising asset allocation over the long term

by | Nov 24, 2022

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How the PruFund range of funds is managed in order to remain an industry-leading solution to market volatility

With so much uncertainty prevailing across global markets the benefits of a smoothed investment option for longer term investors who are keen to minimise the impact of day-to-day market volatility are hard to overlook. 

As a leading provider of smoothed investment options, Pru’s PruFund fund range is invested in the Prudential With-Profits Fund, which is the largest and one of the financially strongest with-profits funds in the UK. It was worth approximately £126.5bn as at 31 December 2021.

How is it managed?

Pru believe that a well-diversified fund is more likely to achieve consistent returns for investors and that value can be added through a sound and well-structured investment process. This is why they use expert investment strategists at the M&G Treasury and Investment Office (T&IO) to make the strategic investment decisions within the PruFund multi-asset fund range.

T&IO’s main objective is to ensure that they optimise the asset allocation of funds. This is core to their investment approach. Importantly, they regularly keep the asset allocation under control. To achieve the right mix of assets at any given time, they have a regular process of monitoring and adjusting the mix for any market or fund changes.

The T&IO approach to asset allocation

Most financial professionals will agree that asset allocation is one of the most important decisions that investors make. To help inform their asset allocation decisions, T&IO analyses the information available to them on the performance of assets over both the long and the short term. They look backward at historical information, and they also look forward to consider how each asset is likely to perform. At the core of any long-term asset allocation decision is a process that has been in place – and successful – for nearly two decades.

Team-based approach

As part of the M&G group, T&IO draws upon the experience of hundreds of investment professionals both in the UK and around the world. And these investment teams are supported by experienced information and risk monitoring teams. Governance and controls are particularly important for T&IO, and as such they work within a thorough and effective governance framework, so that each part of the investment process is reviewed and controlled at all times.

Demonstrable success

PruFund Growth’s 18-year track record provides clear evidence of T&IO’s ability to produce investment returns that help meet investor expectations over long periods and through difficult market conditions.

‘70 out of 71 periods with the With-Profits Fund produced a positive five- year rolling return since 1946’

Please remember that past performance should not be considered a reliable indicator of future performance.

For more details about PruFunds investment returns and smoothing process in effect, please click here

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