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Pru’s unitised WP fund up 8.4% in first year

Prudential’s unitised with-profits product, Prufund, has exceeded expectations by delivering 8.4 per cent in its first year – significantly above the 3.4 per cent annual bonus on its traditional with-pro- fits fund.

The firm says the two products will deliver very similar returns over the longer term when terminal bonuses are factored in, as they both invest in the near-70bn Pru life fund, recently upgraded to a rating of nine out of 10 by Cazalet Consulting.

Pru announces the expected medium to long-term return for Prufund at the start at each quarter, a figure which has remained at 5 per cent since launch.

The unit price has been amended to factor in the extra growth achieved by the portfolio, which has benefited from above-average exposure to equities.

Investment & savings director Hugh McKee says investors in Prufund and the traditional with-profits fund receive different statements because of Prufund’s bid to improve transparency of returns. Pru declines to say how much money Prufund has attracted since launch.

McKee says: “Ultimately, we would expect the same returns for investors in the two products over the same period.”

Dennehy Weller managing director Brian Dennehy says: “Using with-profits has been discredited so most clients would probably be better off in a cautious managed or protected equity fund.”

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