M&G Plc With-Profits Fund, helps protect from market volatility in 2020.
Around 2 million customers to share an expected total bonus of £2 billion
In what was a highly unusual year for global investment markets, the M&G Plc With-Profits Fund returned a positive return of 1.7% in the 12 months to the end of 2020 before taxes and charges. This compares with a -11.5% return from the FTSE 100 Index over the same period, not allowing for any management fees. And over the 10 years to the end of 2020, returns on the same basis were 94.5% and 60.2% respectively.
On the basis of that performance, coupled with the financial strength of the overall fund built up over many decades, around 2 million savers are set to benefit from an expected total bonus of £2 billion.
When setting bonuses, Prudential aims to smooth some of the extreme highs and lows of investment performance by holding back some returns in good years to support bonus rates in years where returns are lower.
The value of any investment can go down as well as up so your customer might not get back the amount they put in.
What the Fund is invested in
Our With-Profits Fund invests in a globally diversified portfolio of assets so captured positive returns from a wide range of underlying investments with some of these gains offset by the overall performance of some of our UK assets and equity portfolios. The investment teams will continue to source and invest in assets that build diversification and help meet the objective of securing the highest total return for the Fund (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders.
| Asset | % |
|---|---|
| UK Equities (listed) | 19.6 |
| Overseas Equities (listed) | 30.1 |
| Property | 13.2 |
| Alternative Assets | 7.1 |
| Corporate Bonds | 24.7 |
| Cash & Receivables | 5.3 |
| Total | 100 |
as at 31 December 2020
David Macmillan, chief customer and distribution officer at M&G plc, said: “In what was a highly-unusual year for global investment markets, the Prudential With-Profits Fund finished strongly, highlighting the benefits to our customers of investing in a multi-asset, globally-diversified fund.
“Being the largest and one of the financially-strongest With-Profits Funds in the UK allows us to be long-term investors in a very wide range of assets and individual companies.
“Our recent announcement that the With-Profits Fund is to invest up to £5 billion into privately-owned enterprises working to create a more sustainable world is just one of the ways we’re meeting increasing customer demand to help them to manage and grow their savings so they can live the life they want, while making the world a little better along the way.”
More information on the 2021 With-Profits Bonus Declaration is available here