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Reasonable effort from Prudential

Prudential

Prudential Cautious Managed Growth Fund

Type: Oeic fund of funds

Aim: Income and growth by investing globally in equities, bonds, property, cash and alternative investments mainly through internally managed funds

Minimum investment: Lump sum £500, monthly £50

Investment split: 49% equities, 15.6% government bonds, 9.7% property, 8.2% investment grade corporate bonds, 2% high-yield corporate bonds, 2.5% alternative investments, 13% cash

Isa link: Yes

Pep transfers: Yes

Charges: Initial 5%, annual 1.35%

Commission: Initial 3%, renewal 0.5%

Tel: 0808 234 0808

Prudential’s cautious managed fund aims for income and growth by investing across a range of asset classes through funds within the Prudential Group.
Asset allocation will be determined by Prudential’s in-house strategists, the Portfolio Management Group, and will not be constrained by a benchmark. Fund manager Matthew Williams will also be able to hold money directly in asset classes such as equities and externally managed funds if needed.

BestInvest Brokers head of communications Justin Modray says: “Multi-asset funds are growing in popularity and, for investors seeking a one-stop shop, they can make a lot of sense.”

He thinks Prudential’s new fund offers reasonable diversity through combining global equities, bonds and property with the re-assurance of the manager having the freedom to adjust asset allocation as he sees fit. “Prudential’s quoted total expense ratio of 1.63 per cent looks reasonable, putting the fund on par with conventional fund,” he says.

Considering the potential drawbacks of the fund Modray observes that the fund invests primarily within Prudential and M&G funds, which ties the fund’s fortunes to those of the group. “I prefer a multi-asset fund such as Midas balanced growth where the managers have the freedom to cherry-pick the best investments across the marketplace.”

He adds that the fund could also have included a higher exposure to alternative assets such as hedge funds, structured products and specialist fixed interest.

Identifying the main competitors, Modray says: “M&G’s own multi asset fund is obviously a natural competitor, as are the Fidelity and Swip funds launched earlier this year. I think the more specialist, unfettered options, such as those offered by Midas, 7IM and Insight nonetheless hold more allure.”
Modray concludes: “This is a reasonable attempt at multi-asset investing, but I would far prefer an unfettered version.”

BROKER RATINGS

Suitability to market Good
Investment strategy Average
Charges Average
Adviser remuneration Average

Overall 6/10

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