Independent Wealth Management

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PruFund – Risk Managed Funds

When choosing how to invest your money, the choices are huge.  There are literally thousands of funds available to you, investing in different geographical areas and asset types.

Many people I meet require a managed fund.  They want the security of knowing that an’ expert’ is looking after their money and making all the day to day decisions.  Managed funds have been around for many years.  Increasingly, these days they tend to be risk rated, enabling an investor to be matched with a suitable fund.  In recent years, there has been much innovation in this area.  A good example of this is the Prudential’s PruFund, which was launched on 25th November 2004.

Volatility

Some investors can get very concerned about the volatility of their investment funds.  They fret about the right time to invest and whether their fund is up or down.  With increased information about fund values on the internet and through the media, this can become quite a preoccupation for investors.

Smoothed returns

PruFund has a unique smoothing process which is designed to help protect your investment from some of the daily ups and downs of direct investment.  Broadly speaking, this smoothed return is achieved by the application of an expected Growth Rate.  This is applied to your fund every day.  The fund is then reviewed quarterly, when it might be adjusted up or down to compensate for any large movement in the underlying assets.

Management Team

It is reassuring to know that this fund is managed by the Prudential Portfolio Management Group comprising 20 members, including economists, strategists, analysts and mathematicians.  These are the same people who manage the long standing with-profits fund with its enviable reputation.  In fact, the PruFund assets are held in the same pool as the globally diversified multi-billion pound with-profits fund.

Risk Managed Funds

The Pru have now taken things a step further by introducing the Risk Managed PruFund.  There are now four version of PruFund.  They all invest in the same assets, but importantly the weighting of each asset class is managed according to your tolerance for risk.  This enables you to simply switch into a different risk managed fund if you want to take more risk to achieve greater potential growth, or reduce risk in order to secure against losses.  This could be particularly useful if you are approaching retirement.

These funds can be used for both pension and investment.

If you want to know more about these funds and whether they may be suitable for you, please get in touch.

This article is for guidance only and should not be taken as advice.  Please remember, that investment returns may go down as well as up.

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When my wife and I were looking for advice on retirement financial planning a few years ago, Barry was recommended to us by another IFA, who no longer provided that type of advice. Over the last few years, Barry has provided us with very good financial planning advice, tailored to our particular needs and attitudes to financial risk. He contacts us regularly to update us with the latest information and to see if our needs have changed but leaves the final decisions to us, i.e. he does not try to push a particular financial product or company. We have been very pleased with his advice to date and look forward to continuing our association with him.

Mr K.T.

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