A Safer Home for Savers and Investors
A very large number of our (normally stockmarket advocating) client base have been contacting us recently seeking sensible investment solutions that seek to deliver good returns without all the accompanying volatility! This is a difficult request to fulfil as we are not keen on the current set of structured products that put your original investment at risk; perhaps too little is known about the providers and the likely returns.
Prudential have been outstanding providers of With Profits Solutions over the last twenty or so years. They have recently launched a very popular Cautious Fund within their With Profits framework that delivers exactly to the objective of providing steady returns and reduced volatility. All of the disadvantages previously attached to With Profits investing have been removed, such as automatic exist charges and unpredictable bonus rates. For those seeking to move their portfolios away from the volatility that comes from investing in global stockmarkets, this is a very high quality solution, one which we will explain further in the following article.
Whether you are seeking superior returns to deposit accounts or wishing to control risk and volatility levels, we believe that a With Profits product may now be relevant to those looking to put money away for five years or more.
We certainly believe that the ‘quality end' of this market can offer a much better lower risk solution for many clients.
We are able to immediately provide you with an exclusive offer from Prudential that fits in with all of the above criteria. The new PruFund Cautious Fund is available through Chartwell with an immediate 5% cash top up; an immediate boost on your investment.
The PruFund Cautious Fund is the most recent addition to the range of funds available through the highly popular Prudential Flexible Investment Plan. It aims to provide steady and consistent growth over the medium to long term through a cautious approach to investing. Given the considerable volatility of stockmarkets in the last couple of years Chartwell Direct believes that a well underpinned, cautious approach to investing has become a sensible option for many.
Our investment analysts like the current balance held between fixed interest, cash and equities. The table below shows the spread of investments and how this would be split if you had invested £30,000 on 9th December 2009.
|
UK Equities |
14.6% |
£4,380 |
|
Overseas Equities |
7.4% |
£2,220 |
|
Property |
5.6% |
£1,680 |
|
Fixed Interest |
64.2% |
£19,260 |
|
Alternative Assets |
5.9% |
£1,770 |
|
Cash |
2.3% |
£690 |
A frequent criticism of typical With Profits Bonds is that actuaries can use a provider's capital reserves to support bonus rates. This can result in a lack of transparency and, in poorly performing markets, force many providers to suddenly introduce tough MVR's. The PruFund Cautious Fund will not expose you to these features.
Prudential have developed a transparent smoothing process for the PruFund Cautious Fund allowing you to understand how your returns are delivered and when to expect adjustments. The transparency of the PruFund smoothing formula represents a significant step forward for investors interested in With Profits Bonds. Within the PruFund Cautious Fund, there are no opaque bonus structures and no Market Value Reductions (MVR's).
The PruFund smoothing formula does not alter fund performance but will alter your investment experience; you won't feel the daily fluctuations in the underlying unit price. Instead of achieving this smoothing by adding bonuses, you will receive a smoothed unit price that grows daily in line with the Expected Growth Rate applicable to the fund. The EGR is set quarterly by the Prudential Assurance Company and is currently 6.10% per annum, gross of charges.
Invest £10,000 or more into the new PruFund Cautious Fund and we will add an extra 5% from day one - a minimum £500 cash top up.
Please see the table below which shows some example investment amounts and the difference the cash top up will make to the initial investment.
|
Your Cheque |
£20,000 |
£30,000 |
£40,000 |
|
Chartwell cash top-up |
£1,000 |
£1,500 |
£2,000 |
|
Amount invested after allocation rate enhancement |
£21,052 |
£31,578.75 |
£42,105
|
How to apply
Find out more information, get an illustration or download the application forms for the PruFund Cautious Fund, or contact a member of the Helpdesk on 0117 9170777.