View more on these topics

Cazalet upgrades Pru WP

Prudential’s with-profits fund has been upgraded in the Cazalet with-profits ratings but the outlook remains bleak for most investors in the sector.

Despite a marginal increase in the average equity exposure of with-profits funds in the first half of this year from 33 per cent to 34 per cent in the same period last year, less than one in four funds has equity exposure of more than 50 per cent.

Cazalet Consulting director Ned Cazalet says he expects this figure to decline steadily due to negative cashflow and the increasing burden of guarantees.

Only three with-profits funds have equity weightings of 60 per cent or more – Liverpool Victoria, Wesleyan and NFU Mutual.

Pru’s upgrade from eight out of 10 to nine follows a sustained period of strong returns that has seen it significantly outperform its peers over three and five years.

Cazalet says the Pru fund has minimal liabilities to endowment misselling claims and annuity guarant-ees which is in stark con-trast to its Scottish Amicable sister fund.

The asset allocation of the fund’s estate, or sur- plus assets, also mirrors the fund itself, which has hel- ped improve solvency by benefiting from the stock- market growth of the past two years.

Standard Life stays on a rating of five, and Legal & Gen- eral retains a rating of eight. Both companies invest their estate in fixed interest.

Cazalet says: “We rarely upgrade anything but Pru- dential is pretty clean on the liability side. The real paradox is that it has perfor- med so well but Prudential has struggled to write new business, so the new busi- ness strain is very modest.”

Central Financial Planning director Ian Smith says: “Prudential has got a good story to keep existing clients but the potential downside of with-profits means I cannot see them attracting a lot of new clients.”

Pru spokesman Steve Colton says: “Our asset-allocation policy has been a major con- tributor to the performance that has been delivered by our fund in recent years.”

Recommended

Analysts say reconstruction should lift US growth by Q4

US growth will suffer in the immediate wake of Hurricane Katrina but is likely to benefit by the end of the year from rebuilding efforts. Oil prices surged to over $70 a barrel after 10 oil refineries on the Gulf of Mexico coast, representing 10 per cent of the US’s refining capacity, were shut down, […]

Drive focuses on the effects of inflation

National Savings & Investments is running a campaign focusing on the effects of inflation to raise consumer awareness of index-linked savings certificates. The campaign has been inspired by research findings which found that only one in four savers takes inflation into account when investing. The drive will see NS&I’s index-linked certificates rebranded as inflation-beating savings […]

Swip in drive to bolster business through IFAs

Scottish Widows Investment Partnership is targeting the adviser market directly with a series of measures aimed at boosting IFA sales. Swip’s distribution has been done through its sister life company’s salesforce and through a deal with Lloyds TSB private banking. The company is increasing its stand-alone sales team to six staff and is setting up […]

SVM aims at alpha demand

SVM plans to set up a UK alpha fund this month with a go-anywhere mandate in response to market enthusiasm for large-cap stocks. The firm offers a UK opportunities fund run by David Stevenson, investing in small and mid-cap companies with scope for an improvement in value but SVM says it has noticed increasing de-mand […]

State of the markets: UK equity income

Artemis Income Fund manager Nick Shenton discusses the state of the UK equity income market with journalist Alexis Xydias. With the first three months of 2015 showing strong returns for both the Artemis Income Fund and UK markets generally, Nick Shenton discusses the fund’s top contributors – including overseas holdings Novartis and Bayer – and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com