Pru smoothing

squash18

I believe these funds dropped by up to 10% in March. Am I right in thinking these drop the same amount as other funds in the same risk bracket but then do not go up the same. 

Seems like a very expensive way of doing things with the charges they have, and I just cannot see the point of them. 

What are peoples views of the products? 

arnoldy

Opaque, unclear and not very transparent.
Exactly what the financial services industry likes - it helps  them avoid accountability for charges/performance. In some types of schemes they sell it is beneficial for them to hold back money and create "orphan funds" - they can get 10% of these "surplus" funds although they are really the investors money albeit after horrific charges and poor performance.

BritishInvestor

arnoldy said:

Opaque, unclear and not very transparent.
Exactly what the financial services industry likes - it helps  them avoid accountability for charges/performance. In some types of schemes they sell it is beneficial for them to hold back money and create "orphan funds" - they can get 10% of these "surplus" funds although they are really the investors money albeit after horrific charges and poor performance.

"Exactly what the financial services industry likes"
Think that's a bit of a sweeping statement.

squash18

I have numerous friends in them with their sipp and I cannot see any advantage in these products at all. 

The charges they are paying will add up over the years so I’m wondering why not switch from day pru cautious to vanguard lifestyle 40?

Thrugelmir

How do the longer term performances of the funds compare?  Not just the past 10 months. 

squash18

When I look at say trustnet and they give a percentage does that inlclude charges or not? I’m guessing the latter 

dunstonh

I believe these funds dropped by up to 10% in March. Am I right in thinking these drop the same amount as other funds in the same risk bracket but then do not go up the same. 

Which Prudential funds are you referring to?
I suspect you are not referring to their conventional unit linked funds but it could be their old With Profits fund (of which there were multiple versions or their more recent Pru fund (again multiple versions exist).

The drops suggest the Pru fund rather than the WP fund.    Smoothing tends to lag. Both in going down and going back up.  Nothing about it really makes it an exciting option I would want to have or use.

Seems like a very expensive way of doing things with the charges they have, and I just cannot see the point of them. 

The old WP funds are actually pretty good and usually good value (typically 1% all in or less.  They also had a greater degree of capital security).  The newer Pru funds, in my opinion, are not desirable and the costs are not worth it.  I consider it a niche fund for people that dont understand volatility and need something that reduces it as much as possible.

It is a little ironic that the move to the more transparent methods on the Pru fund have actually resulted in a poorer quality version than the older less transparent fund WP funds.  The older WP funds seem to perform better too.

What are peoples views of the products? 

The old WP fund version can be a gem if you are on one of the low cost versions from 20 years ago or so.   The later Pru fund versions are a niche option, in my opinion, that is massively oversold to people that either have given the impression they don't understand investments and don't want to or laziness from the adviser/agent to put them in such an option. 

squash18

dunstonh said:

I believe these funds dropped by up to 10% in March. Am I right in thinking these drop the same amount as other funds in the same risk bracket but then do not go up the same. 

Which Prudential funds are you referring to?
I suspect you are not referring to their conventional unit linked funds but it could be their old With Profits fund (of which there were multiple versions or their more recent Pru fund (again multiple versions exist).

The drops suggest the Pru fund rather than the WP fund.    Smoothing tends to lag. Both in going down and going back up.  Nothing about it really makes it an exciting option I would want to have or use.

Seems like a very expensive way of doing things with the charges they have, and I just cannot see the point of them. 

The old WP funds are actually pretty good and usually good value (typically 1% all in or less.  They also had a greater degree of capital security).  The newer Pru funds, in my opinion, are not desirable and the costs are not worth it.  I consider it a niche fund for people that dont understand volatility and need something that reduces it as much as possible.

It is a little ironic that the move to the more transparent methods on the Pru fund have actually resulted in a poorer quality version than the older less transparent fund WP funds.  The older WP funds seem to perform better too.

What are peoples views of the products? 

The old WP fund version can be a gem if you are on one of the low cost versions from 20 years ago or so.   The later Pru fund versions are a niche option, in my opinion, that is massively oversold to people that either have given the impression they don't understand investments and don't want to or laziness from the adviser/agent to put them in such an option. 

The products have been sold in the last 3 years so I guess that’s the newer ones 

BritishInvestor

j.p said:

I wonder if that's akin to a volatility-reactive fund. I seem to remember there are funds that de-risk 20% when volatility increases, and when it decreases it re-risks (once again buys risky assets) but only in increments of 5%.
The problem with that reasoning is that if volatility rises and collapses again quickly (leading to asset prices looking like a "V" in a chart) these funds will be left behind. It would have quickly sold assets at a lower price, and later bought them again in stages when they're more expensive (though not while they're still down, because if they've done a "V" by definition they aren't). I'd rather buy into a fund that doesn't try and 'time' volatility, one that accepts lower prices when there are lower prices (and it doesn't mistakenly think it has an edge) and it just stays invested.
I can't recall now those funds' names, but I thought it was an awful strategy.

"I can't recall now those funds' names"
Probably best to refer to them as "Crap Idea A" for the time being

[Deleted User]

Its a marketing gimmick. Wouldn’t touch it.

arnoldy

j.p said:

Here's one of them. Makes me want to throw up… And yet they're sold to people who aren't going to be actively managing their pension, they're only asked to fill a questionnaire about risk level and go away… Criminal.
https://www.retiready.co.uk/public/shop/investments-range.html

Had a look at this and  as you say - basically colouring by numbers / Janet and John 2a approach. It is hard to establish what the underlying investments are - and what their performance has been for both the investments and the pension. One assumes this is because its nothing to shout about.
All very sad and that people are not more knowledgeable and engaged. Because they don't understand it generates a feeding frenzy amongst the financial services industry on this type of customer. They probably also have money in dog funds without knowing too.