Prudential has extended its range of investment funds to provide more options for clients at different stages of their life.
The PruFolio Risk Managed range, launched today (January 21), consists of five passive, five active and five smoothed funds, and a new Risk Managed PruFund 5, designed for investors with a higher risk appetite.
PruFund 5 is aimed at investors who want to try and achieve higher rates of return while employing a mechanism to smooth volatility.
Its expected growth rate is the highest for any version of the PruFunds, but there is no guarantee it will manage volatility to its ceiling level.
Paul Fidell, senior business development manager for investments at Prudential, said: "We believe the PruFolio range will appeal to advisers who want a selection of funds they can use to more easily match to clients’ risk profile in different stages of their life.
"It is designed for customers who want a diversified investment that offers the prospect of better returns over five to 10 years than they would get from leaving money in a bank."
The OEIC versions of the funds will be available on major platforms, while PruFund will be available on the insurer’s pension, Isa and bond products.
Charges for OEIC versions of the funds will be reduced by up to 100 basis points, and investment objectives will switch from specifying a maximum equity content to introducing a volatility ceiling to give fund managers more flexibility in how they manage their funds.
Mr Fidell said: "Advisers have told us they want outcome-oriented funds. Targeting volatility rather than sticking to a predetermined equity content is a clearer way to align the funds’ objectives to a customer’s risk profile."
He said previously the funds’ investment objectives prescribed how much of a fund could be invested in equities, but this did not enable managers to target a specific level of risk.
"Our fund managers will now have more flexibility in how they manage each fund to its agreed level of risk," he added.
Rob Morgan, pensions and investments analyst at Charles Stanley, said there was a growing number of multi asset investments that offered straightforward, off-the-shelf solutions to advisers who knew precisely what their customers wanted and how much risk they wished to take.
Mr Morgan said: "This range should certainly appeal in terms of its breadth, as well as the fact that funds are managed to a volatility objective rather than an asset allocation one. This correctly reflects that risk and diversification are dynamic and can’t be fully addressed through inflexible asset allocation models."
Strategic asset allocation decisions for the PruFolio funds will be made by the M&G Prudential Investment Office, which includes the team formerly called the Prudential Portfolio Management Group.
The investment portfolios of the PruFolio fund range will be managed by M&G Investments.