Pru Fund investment ISA or savings account

Advice4sue

Hi
I invested in a Prudential Prufund ISA in June transferring from last years cash isa . I have the max amount in it. My IFA suggests I also use this years allowance to put in another 20k.
I would then be left with 10k in an easy access at 1.5%.

All this is new to me as it was inherited money and I want to be sensible, hence using an IFA.

But I’m nervous about it even though it has a ‘smoothing strategy ‘ to try to avoid major ups and downs. With Brexit etc I’m edgy and also as I haven’t invested before. I keep seeing the warnings that are on every investment about returns and potential losses.

I also recognise that ordinary savings accounts also lose by not keeping up with inflation but somehow because you still see the money it seems different.

Does anyone here use the Prufund?
Are you happy with it? Also, am I being over cautious?
Thanks

Linton

You are being over cautious. I have held a Prufund Investment Trust for something like 18 years and barring one or two years has steadily provided a moderate return higher than available from a savings acount. Even during the 2008/2009 crash which was a far more globally significant event than BREXIT it barely faltered.

Albermarle

I also recognise that ordinary savings accounts also lose by not keeping up with inflation but somehow because you still see the money it seems different.

If it helps imagine yourself in 10 years time . You have put £50K into savings accounts over the years and now you have say £58K . Then someone says if you had invested it a Prufund investment trust it would be worth £75K ( estimate of course ) how would you feel then ?

Suggest better to not watch it on a short term basis or worry about things Brexit etc .and whatever you do, do not withdraw money after the markets have had a down period. Just think long term and they will pick up again.

Malthusian

PruFund has a bad rap on here because most forum regulars wouldn't use it, as they are familiar with the ups and downs of the stockmarket and embrace them.

You however aren't an experienced investor and don't like seeing your money go down, which means you're pretty much PruFund's ideal target audience.

The idea behind PruFund and With Profits in general is that you won't see the fund value go down - except in very bad years (as Linton refers to re 2009). The cost of that is lower returns, due to the need to hold back growth in good years to keep paying returns in bad ones, and higher charges.

From the perspective of a PruFund investor Brexit is an irrelevant local news story. PruFunds are globally diversified multi-asset funds. With your PruFund investor hat on, you should hope that Brexit is a complete disaster as a) Sterling would fall and your PruFund assets would go up in Sterling terms b) you have more invested outside the UK then in, so business flooding out of the UK and into the rest of the world would give you a net gain.

Advice4sue wrote: »

Also, am I being over cautious?
Thanks

When will you need to spend the £20k?

Advice4sue

I would love to be braver but I certainly don’t have the confidence to do much with a greater risk with a large amount . But I will probably go with Prufund.
I do have a small general investment with Moneybox and chose the more high risk one. It’s fascinating to watch it suddenly gain but of course it does go down as well. But as it’s a small investment and I’m happy with it..

MaxiRobriguez

You don't need to be brave to be aggressive, you just need a long investing horizon and the ability to ignore your portfolio for a long time.

fjh

I put 60% of pension in Pru retirement - they ‘dropped’ value via ‘smoothing’ last December, they review every 1/4 and have not increase smoothing and have now advised that anticipated return is reduced - not been impressed - My Vanguard has been much better.

Malthusian

fjh wrote: »

I put 60% of pension in Pru retirement - they ‘dropped’ value via ‘smoothing’ last December, they review every 1/4 and have not increase smoothing and have now advised that anticipated return is reduced - not been impressed - My Vanguard has been much better.

As you'd expect in a bull market.

Advice4sue wrote: »

I do have a small general investment with Moneybox and chose the more high risk one. It’s fascinating to watch it suddenly gain but of course it does go down as well. But as it’s a small investment and I’m happy with it..

Moneybox is expensive and a downright rip-off for small amounts, due to the fixed £12 per year charge.

SonOf

fjh wrote: »

I put 60% of pension in Pru retirement - they ‘dropped’ value via ‘smoothing’ last December, they review every 1/4 and have not increase smoothing and have now advised that anticipated return is reduced - not been impressed - My Vanguard has been much better.

Of course the Vanguard fund has been better in a short term growth period. Equally, the Vanguard fund will lose more in the negative periods.

Which Vanguard fund are you referring to?

Advice4sue

‘I put 60% of pension in Pru retirement - they ‘dropped’ value via ‘smoothing’ last December, they review every 1/4 and have not increase smoothing and have now advised that anticipated return is reduced - not been impressed - My Vanguard has been much better.’
Originally posted by fjh

But what is the expected reduced return?
What have the returns been like?

Advice4sue

Re Moneybox! Oh dear...., shows my inexperience..... I got it because in theory I can add odd pennies to it whenever I spend by linking it to my bank account.
I obviously checked with HSBC first. It was quite good but then the link failed and needed redoing and I decided against it as I wasn’t 100% happy with it.