Pru launches funds for flexible pensions funds

Prudential has launched five new funds for corporate pension customers wanting to make use of the new pensions freedoms.

The pension provider’s revamp means it will be adding a total of five multi-asset funds to its corporate pension fund range.

The Prudential Dynamic Growth funds are actively managed by Prudential’s Portfolio Management Group and combine asset allocation strategies with passive equity funds from BlackRock and M&G’s active fixed-interest funds.

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Prudential said the funds would aim to deliver long-term growth through investing in a diversified range of assets both in the UK and globally.

John Warburton, distribution director at Prudential, said the funds catered for different scheme and member risk appetites and could be used flexibly across various investment solutions as customers saved for their retirement, or when they were looking to make the most of their income in retirement.

The range has five funds with varying equity allocation, ranging from 0 to 30 per cent for Prudential Dynamic Growth I, to Prudential Dynamic Growth V, which has 60 per cent to 100 per cent invested in equities.

Mr Warburton said: “The launch of the Dynamic Growth Funds, priced to sit between active and passive investments, gives our corporate customers a modern, cost-effective, default investment solution which offers diversification, flexibility and choice around the new pension freedoms.

“The addition of further default lifestyle strategies demonstrates our commitment to offering enhanced levels of flexibility to our customers. These enhancements are part of our continuing corporate pensions proposition development to meet evolving customer needs.”

Welcoming the development, Derek Bradley, chief executive of online network Panacea Adviser, said Prudential’s launch of an online retriement calculator would also “help enhance its offering for corporate pension clients”.

The Dynamic Growth Funds

Fund Equity allocation
Prudential Dynamic Growth I (PDG I)0% to 30%
Prudential Dynamic Growth II (PDG II)10% to 40%
Prudential Dynamic Growth III (PDG III)20% to 55%
Prudential Dynamic Growth IV (PDG IV)40% to 80%
Prudential Dynamic Growth V (PDG V)60% to 100%

Source: Prudential

Adviser view:

Peter David, a pensions adviser at Surrey-based Alliott Graham Brown Financial Planning, said: “Multi-asset funds are becoming increasingly popular as pension savers look for funds that aim to manage risk more effectively, particularly as many more people will be looking to maintain their investment strategy into retirement to take advantage of the new pension freedoms.

“Those funds where the equity element is built around low-cost trackers and that have a choice of lifestyling options, should be a welcome addition for corporate pension schemes trustees, who will be looking for effective investment solutions that represent good value for their members.”