Prudential builds long-term growth for its with-profits investors

Prudential International’s with-profits investors are to receive increases of up to 13 per cent in their year-on-year policy values after Prudential’s with-profits funds, which underpin their investment, delivered an exceptional return ranging from 12 to 15 per cent (before tax and charges) in 2006.

A typical customer with an International Prudence Bond policy will have seen its value increase by 51 per cent from £100,000 to £150,181 over the 5 years up to 1 July 2007. This projected fund value represents an overall return of 8.5 per cent each year over the last 5 years.

For the third consecutive year, Prudential International has increased year-on-year payouts across its with-profits bonds and this is once again the yardstick that other companies reporting with-profit fund and policy performance have to measure up to.

Excellent increases in policy values

Policies in 2007 show increases compared with their position a year ago of:

5-year International Prudence Bond Sterling (£100,000 single premium) up 13 per cent on its value in 2006

5-year International Prudence Bond Euro (€ 150,000 single premium) up 12 per cent on its value in 2006

4-year International Prudence Bond Dollar ($150,000 single premium) up 8 per cent on its value in 2006

How does Prudential’s compare?

Prudential’s with-profits investments continue to hold their own against the alternatives available to investors and at a level of risk that is often significantly lower than other actively managed multi-asset investments.

In 2006, the Prudential with-profits sterling return was 12.4 per cent representing a significant out-performance over the average sector returns of: Balanced Managed Funds 9.1 per cent; Distribution Funds 6.8 per cent; Cautious Managed Funds 5.9 per cent and cash at 3 per cent. This performance suggests that investing in with-profits with Prudential works and it removes any doubt suggesting that an actively managed with-profits policy is in some way an inferior investment choice for customers.

Over five years to 31 December 2006, the With-Profits Fund has achieved a total return of 63.8 per cent, against 41.1 per cent for the FTSE 100 (total return) index and 50.2 per cent for the FTSE All-Share (total return) index. Over 10 years, the fund has returned 161.9 per cent against 102.7 per cent for the FTSE 100 (total return) index and 114.0 per cent for the FTSE All-Share (total return) index.

Peter Towers, Managing Director, Prudential International, said: “The financial strength of Prudential’s with-profits fund has contributed to an outstanding performance and this is seen in the significant increase in year-on-year policy values in 2007. Investing in with-profits with Prudential works and this excellent performance removes any doubt suggesting that an actively managed with-profits policy is in some way an inferior investment choice for customers.”

“The with-profits style of investing through Prudential International, backed by the AA+ rating of the Prudential with-profits fund, remains attractive to investors across Europe as it offers a unique blend of investment diversification and risk reduced market exposure.”