Pru Profund Growth Fund

fionasmith14

Hi,

Ive invested some money (through my IFA) into the prudential profund Growth Fund.

This may be one of the stupidest questions I've ever asked but I'm not the best when it comes to money..........It states that the funds performance has been 23.29% in the last 3years. Does this mean that minus fees etc, that if i has invested £1 three years ago this would now have grown by 23%?

Thanks

Lokolo

Yes that's right.

kangoora

Looks good doesn't it?

Don't forget though, if the markets had crashed by 40% over that period your £1 could now be worth 60p (depending on how the fund performed compared to the general market, so could be more or less)

fionasmith14

Thanks guys. It does look good but I'm very mindful that it could equally be a loss should the market change. Im Scottish so still count my little bronze pennies. Can I ask, my IFA did say that we could incorporate a rule by which my initial / current value investment would be protected if the markets changed (within a set limit) but I'd lose 1% to do this. I'm hopeful he'd advise me at any point he thought this was a good idea but I'd be grateful for any advise on your feelings on implementing this.

bowlhead99

Personally I don't buy explicit insurance against falls in the value of my investments because it always costs money off the upside.

By holding the investments a long time, you can effectively 'self insure'... in that in the long long term, investments usually do pretty well compared to cash, and that way you get access to all the investment growth - 1% a year is costly.

And most importantly, with what you are proposing (which is impossible to analyse without the full details) you are only protected if the markets change within a set limit. If they change by more, you typically CAN lose some of your deposit. So, if the market doesn't fall to extremes, you can just ride it out and stay invested until it bounces back, and if it does change by extremes, the insurance doesn't cover it; hence, the insurance is worthless. So either way, I don't need insurance, would be my logic

Of course, it depends on your objectives, which you haven't told us.

dunstonh

but I'm very mindful that it could equally be a loss should the market change.

The market changes every minute of the day. That is normal with investments.

Can I ask, my IFA did say that we could incorporate a rule by which my initial / current value investment would be protected if the markets changed (within a set limit) but I'd lose 1% to do this.

Capital security is expensive and that is the cost you would expect. Personally, I wouldnt use it but if you are already nervous about volatility on what is a lower risk investment then maybe it is right for you.

fionasmith14

Thanks very much guys. Great to know. The money is certainly being invested in the long term (20+) in the hope that I can retire early but also live a comfortable life at the momment. Im currently 28. Therefore the idea of self insuring based on the markets previous history looks like the route for me. Thanks for pointing that out. Im not particularly nervous but just mindful and as i don't have any previous experience of investing, its still a learning cure.