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PruFund Expected Growth Rates and Unit Price Adjustments
We set Expected Growth Rates (EGRs); these are yearly rates a customer’s investment will normally grow at. They reflect our view of how we expect the underlying assets of each PruFund to perform over the long-term (up to 15 years) and the longer a customer stays invested, the better their chances of receiving returns in line with these expectations.
Each PruFund has its own EGR, and a customer’s investment will normally grow daily by the relevant EGR, through an increase in the price of the units they hold (known as the Smoothed Price). Although we take a long-term view, we do review the rates every three months to allow for any changes, which may mean a change in EGR on a quarterly basis, up or down.
The PruFund quarter dates are: 25 February, 25 May, 25 August and 25 November (or the next working day if the quarter date is a weekend or Bank Holiday).
Although we use a long-term view of performance to set the EGRs, we may have to take into account short-term performance when this is significantly different from our long-term expectations. If the short-term performance differs too much from our current EGR, the fund’s unit price is adjusted to amend the value of your fund up or down to ensure all fundholders receive fair value. We call these Unit Price Adjustments (UPA).
The tables below show the current EGRs (gross of all product charges), correct as at the most recent quarter unless otherwise indicated. The links below will provide you with details of historic EGRs and Unit Price Adjustments.
PruFund Investment Plan (Mark 1)
EXPECTED GROWTH RATE
(%)PruFund Growth & Income Fund
5.80
PruFund Growth Fund
6.10
PruFund Investment Plan (Mark 2)
EXPECTED GROWTH RATE
(%)PruFund Cautious Fund/PruFund Protected Cautious Fund
5.50
PruFund Growth Fund/PruFund Protected Growth Fund
6.10
PruFund Investment Plan (Mark 3)
EXPECTED GROWTH RATE
(%)PruFund Cautious Fund/PruFund Protected Cautious Fund
5.50
PruFund Growth Fund/PruFund Protected Growth Fund
6.10
PruFund Risk Managed 1 Fund
5.10
PruFund Risk Managed 2 Fund
5.50
PruFund Risk Managed 3 Fund
5.80
PruFund Risk Managed 4 Fund
6.30
PruFund Risk Managed 5 Fund
6.70
Trustee Investment Plan
EXPECTED GROWTH RATE
(%)PruFund Cautious Pension Fund/PruFund Protected Cautious Pension Fund
6.70
PruFund Growth Pension Fund/PruFund Protected Growth Pension Fund
7.40
PruFund Risk Managed 1 Pension Fund
6.20
PruFund Risk Managed 2 Pension Fund
6.60
PruFund Risk Managed 3 Pension Fund
7.10
PruFund Risk Managed 4 Pension Fund
7.50
PruFund on Platform - Series P
EXPECTED GROWTH RATE
(%)PruFund Risk Managed 1 Fund
6.20
PruFund Cautious Fund
6.70
PruFund Risk Managed 3 Fund
7.10
PruFund Growth Fund
7.40
PruFund Risk Managed 5 Fund
7.80
Important Information about the Expected Growth Rates
Past performance is not an indicator of future performance. Remember that the value of an investment can go down as well as up, your client may not get back what they paid in.
The Expected Growth Rates set at each quarter date may be higher, the same or lower than those applying at the start of the investment.
In addition, there may be times where the unit price may be adjusted which will impact any growth that clients may receive. The overall return achieved on any plan is affected by the amount of the investment, investment performance, the period over which the plan has been invested and the charges applicable to the plan.
We may decide to reset the smoothed price of a PruFund fund on a particular day, to protect our With-Profits Fund and therefore the interests of all our With-profits policyholders. This is not expected to happen often, and is only expected to be used in highly unusual circumstances.
If we decide to reset, the smoothed price of the affected fund would be adjusted to be the same value as the unsmoothed price on that working day. That adjusted smoothed price will then continue to grow in line with the Expected Growth Rate from the working day after this reset of the smoothed price. This is referred to as a Unit Price Reset in our literature.
There may be occasions where we have to suspend the smoothing process for one or more PruFund funds for a period of consecutive days, to protect our With-Profits Fund and therefore the interests of all our With-profits policyholders. This is not expected to happen often, and is only expected to be used in highly unusual circumstances. When this happens the smoothed price for the affected fund(s) is set to the unsmoothed price for each day until we reinstate the smoothing process.
You should refer to Key Features or Terms & Conditions of your client's plan for more information on how the Expected Growth Rates work.
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"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at 5 Central Way, Kildean Business Park, Stirling, FK8 1FT. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company. The Prudential Assurance Company and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc, a company incorporated in the United Kingdom. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.