- 73.4% of Prudential’s pension funds have a history of underperformance, with 80 out of 109 funds receiving a low one or two-star rating.
- Of the 109 funds analysed, 14 earned top 4 or 5 star performance ratings over the past 1, 3, and 5 years.
- The Pru European Equity pension fund was among their best performing funds, with growth returns of 10.58%, 27.70%, and 45.71% over the past 1, 3, and 5 years, each of which were consistently above the sector averages.
- The Pru PruFund Planet 5 Fund has been one of their worst performing funds with lowest returns of 8.05% and 0.69% over the past 3 & 5 years.
Prudential stands as one of the UK's most enduring pension providers, with a heritage dating back over 175 years. Now part of M&G plc, the company is renowned for its diverse range of pension solutions, including the Prufund range, which leverages a unique smoothing mechanism to manage market volatility. With a strong focus on sustainable investing and robust governance, Prudential offers solutions tailored to a variety of risk profiles and retirement objectives, making it a trusted name in retirement planning.
In this article, we analyse the recent 1, 3, and 5-year performance of 109 Prudential pension funds, comparing their returns against peer funds within the same sectors. We highlight Prudential's top-performing funds as well as those that have underperformed, providing a comprehensive overview of their fund performance.
Prudential Pension Funds Performance
We conducted a comprehensive review of 109 Prudential pension funds, assessing their performance and sector rankings over 1, 3, and 5 years. Each fund was evaluated and assigned an overall performance rating based on its returns relative to peers within its sector.
Our analysis revealed that just 14 funds achieved a high rating of 4 or 5 stars, reflecting consistently strong performance and competitive returns in their respective sectors.
However, the majority of the funds underperformed, with 80 obtaining lower ratings. Among these, 35 funds (32.1%) were rated 2 stars, and 45 funds (41.3%) received the lowest possible rating of 1 star.
These outcomes highlight that most Prudential pension funds have struggled to outperform their sector peers across the periods analysed.
Top Performing Prudential Pension Funds
The table below features 5 of the best performing Prudential pension funds with each fund consistently outperforming their sector peers over the 1, 3 & 5 year periods analysed.
Pru Asia Pacific Pension Fund
The Pru Asia Pacific Pn Fund has emerged as a standout performer within Prudential's pension fund range, excelling in the PN Asia Pac ex Jpn Equities sector. Designed to deliver a blend of capital appreciation and income, the fund seeks to outperform the FTSE Custom Asia Pacific ex Japan Country Capped Index over a three-year horizon. With £39.04 million in assets under management, the fund adopts an active management strategy, focusing on technology, financials, and industrials across the Asia Pacific region (excluding Japan), while prioritising companies with strong growth prospects, financial stability, and a competitive edge.
The fund's performance has been exceptional across multiple time frames, consistently outperforming its peers and benchmarks. Over the past year, it delivered growth of 18.83%, surpassing the sector average of 14.18%. Over three years, its performance was particularly notable, achieving 20.68% growth compared to the sector average of 1.41%, placing it 5th out of 202 funds in its sector. The five-year return of 40.16% further solidifies its track record, comfortably exceeding the sector average of 22.9%.
This outperformance is underpinned by a well-executed asset allocation strategy and a focus on high-growth sectors. The fund has benefited significantly from holdings in market leaders such as Taiwan Semiconductor Manufacturing Company, AIA Group, and Samsung Electronics. These companies have contributed to the fund’s success through their market dominance, innovation, and ability to capitalise on structural growth trends. Furthermore, the fund's diversified approach, spanning sectors and countries, has allowed it to harness the economic dynamism of the Asia Pacific region, particularly in emerging markets.
Pru Dynamic Growth Pension Fund
Launched in 2015, the Pru Dynamic Growth I Pn S3 Fund is designed to deliver long-term growth by investing in a diversified range of assets both within the UK and globally. At any time, the fund will allocate a maximum of 30% of its assets to equities.
Its long term strategy is grounded in a rolling 10-year investment forecast, enabling it to focus on sustainable growth while adapting to changing market conditions. The portfolio includes a mix of equities, sovereign government debt, investment-grade corporate bonds, and high-yield corporate credit. Asset allocation is guided by an evaluation of relative potential returns, ensuring an optimal balance to achieve steady growth while effectively managing risk.
This efficient approach has supported its solid performance in the PN Mixed Investment 0-35% Shares sector. Over the past year, the fund returned 10.19%, well ahead of the sector average of 8.87%. Its three-year growth was comparatively better, with a return of 1.65%, compared to the sector's average decline of -2.14%. Over five years, the fund achieved an impressive return of 11.76%, more than double the sector average of 4.67%.
The fund’s consistent ability to outperform sector benchmarks underscores its capacity to provide dependable returns, even amidst fluctuating market conditions. Its disciplined and diversified investment strategy, combined with a steadfast focus on long-term growth, positions it as an attractive option for investors seeking stable returns with a moderate risk profile.
Pru European Equity Pension Fund
The Pru European Equity Pension Fund was established on 26th January 1994 and currently manages £41.74 million. It is designed to achieve capital growth by investing in European companies, excluding those based in the UK.
The fund's investment strategy involves purchasing shares in European (excluding UK) companies via other M&G funds. Operating as a "fund of funds," it holds units in several specialised European equity funds, providing access to a variety of methods for generating returns under varying market conditions.
This five-star rated fund has demonstrated exceptional performance, with growth of 10.58%, 27.70%, and 45.41% over the past 1, 3, and 5 years, respectively. In comparison, the sector averages for these periods were 5.61%, 6.71%, and 35.18%. This impressive track record places it among the top-performing Prudential pension funds within the PN Europe ex UK Equities sector.
The fund's outperformance is primarily attributed to its diversified portfolio, which encompasses key sectors such as financials, industrials, and healthcare. Its approach of investing in European equity funds maximises growth opportunities while maintaining effective risk control. Furthermore, the fund employs a smoothing mechanism to reduce the impact of market fluctuations, providing a stable and reliable investment experience.
Pru Japanese Pension Fund
The investment strategy of Prudential Japanese Series A Fund is to purchase units in the M&G (ACS) Japan Equity Fund, the underlying fund. Its main objective is to deliver a higher total return (capital growth plus income), net of the Ongoing Charge Figure, than the S&P/Topix 150 Index over any three years.
This £8.03 million fund has consistently outperformed its peers in the PN Japan Equities sector. Over the past year, it returned growth of 14.91%, which was comfortably better than the sector average of 12.63%. Its three-year and five-year performances further highlight its strength, achieving returns of 20.78% and 27.02%, compared to sector averages of 11.49% and 26.01%, respectively.
The fund’s success is driven by its diversified approach, which targets Japanese growth sectors and leading corporations such as Toyota, Hitachi, and Mitsubishi UFJ Financial Group. These top holdings have been instrumental in driving returns due to their market dominance and strong financial performance.
Moreover, the fund has benefited from Japan’s economic recovery, improved corporate earnings, and a robust stock market supported by low interest rates and stable inflation. Prudential’s effective multi-channel distribution model has enhanced sales and profitability in the Japanese market.
Pru UK Equity Index Pension
Launched on 6th April 2001, the Pru UK Equity Index Pn S3 has also proven itself as a prominent Prudential pension fund and oversees £54.02 million in assets.
It aims to replicate the FTSE All-Share Index through a diversified portfolio of UK equities, targeting total returns, including capital growth and income, over three years. This is achieved by investing in the M&G PP UK Equity Index Fund, which gains exposure via the M&G (ACS) BlackRock UK All Share Equity Fund, fully aligned with the index’s constituent securities.
Though passively managed, the fund benefits from professional oversight and employs a systematic, bottom-up stock selection process to ensure its risk-return profile closely tracks the index. Additionally, its strong commitment to Environmental, Social, and Governance (ESG) principles, favouring high ESG-scoring securities, demonstrates a focus on socially responsible investing. This blend of market exposure and ESG integration has bolstered its appeal.
The fund has consistently exhibited notable performance. Over the past year, it achieved a return of 16.13%, outperforming the sector average of 14.22%. Its three-year cumulative growth of 25.59% is double the sector average of 12%, while its five-year return of 30.83% is also far above the sector average of 20.53%. These figures position it as one of the top-performing funds in the PN UK All Companies sector.
Poor Performing Prudential Pension Funds
As identified in our full Prudential Pension Fund Performance Review, not all of their pension funds have delivered strong performance. As highlighted in our performance summary, 80 of the 109 Prudential funds analysed have consistently underperformed compared to their sector peers and received a poor performing 1 or 2 star rating.
Below we identify 5 Prudential pension funds that have consistently ranked among the worst performers in their sectors, each receiving a poor 1 star rating.
Pru Managed Pension Fund
The Pru Managed Pension Fund classified within the Mixed Investment 40-85% Shares sector, manages £1.285 billion in investor assets. Its main goal is to provide medium to long-term growth by investing primarily in a broad spectrum of Prudential's investment-linked funds and collective investment schemes. The fund's portfolio typically comprises UK and international equities, fixed interest securities, and commercial property.
Despite its clear investment strategy, the fund has struggled to deliver competitive returns and is consistently ranked among the poorest performing Prudential pension funds. In the past year, it recorded growth of 12.78%, trailing behind the sector average of 14.51%. Over three years, the fund delivered a return of 8.95%, slightly below the sector average of 9.17%. Its 5-year performance shows a return of 20.11%, again underperforming the sector average of 27.12%.
The fund has lagged behind its peers due to several key factors. Firstly, heightened market volatility has taken a toll on the fund, with unpredictable global market swings directly impacting the value of its equity and bond holdings. Economic challenges, including changes in interest rates, inflation, and geopolitical uncertainties, have further constrained its returns. Perhaps most crucially, its asset allocation choices have not worked in its favour.
The fund’s focus on certain sectors and regions seems to have backfired during periods of sectoral underperformance.
Pru PruFund Planet 5 Pension Fund
The Pru PruFund Planet 5 Fund is an actively managed fund within Prudential's popular PruFund range. The fund's diversified holdings includes UK and international equities, fixed interest securities, property, and other specialist investments.
The fund has faced challenges and consistently underperformed relative to its sector peers over recent years. Over the past 12 months, it returned 8.05%, and over three years, just 0.69%, both of which are substantially lower than the sector averages of 15.94% and 9.25%, respectively. These results highlight its position as a poor performer within the PN Flexible Investment sector.
Market volatility and economic pressures have negatively impacted asset values, with diversified portfolios being particularly susceptible to global fluctuations. Its ESG focus, while admirable, likely narrowed the scope of investment opportunities, putting it at a disadvantage compared to less restricted counterparts.
Pru Risk Managed Active 4 Pension Fund
The Pru Risk Managed Active 4 Pension Fund, part of the PN Mixed Investments 40-85% Shares sector, is also considered one of the poor performing Prudential pension funds.
The fund’s performance has been notably underwhelming, with a 12-month return of 12.21%, falling short of the sector benchmark of 14.51%. Its three-year performance stood at 4.26%, which was significantly weaker than the sector’s 15.94% average. Over five years, the fund recorded growth of 16.06%, well below the sector average of 27.12%.
The disappointing performance of the fund is largely due to its tactical asset allocation choices, such as prioritising equities while cutting back on European credit exposure, which have not delivered the expected results. Its investments in global equities and bonds leave it vulnerable to market ups and downs. Adding to the challenge is the relatively high annual management charge of 1.41%, which eats into returns, especially in a low-yield market.
Pru UK Equity and Bond Pension Fund
The Pru UK Equity and Bond Pension Series A Fund manages approximately £12.76 million in assets. Its primary objective is to provide long-term growth by investing primarily in UK equities and sterling-denominated corporate bonds through collective investment schemes.
Over the past year, the fund delivered a return of 10.34%, slightly trailing the sector average of 11.19%. Its three-year return of 1.63% was below the sector average of 3.45%. Over five years, the fund returned 7.68% nearly half of the sector average of 14.15%. This consistent underperformance has placed the fund among the poor performers in the PN Mixed Investments 20-60% Shares sector.
A key factor contributing to its underperformance is its strategy of investing mainly in UK assets, which limits diversification benefits and makes the fund vulnerable during periods when UK markets underperform. Additionally, the fund has faced challenges in navigating a volatile economic environment, including Brexit impacts, inflationary pressures, and fluctuating interest rates. The allocation choices within its portfolio may not have optimally aligned with market conditions, further affecting performance.
Prudential Global Equity Pension Fund
The Prudential Global Equity Pn S1 Fund has consistently ranked among the weakest performers in Prudential's pension range.
Its strategy involves purchasing units in the M&G PP Global Equity Fund, which allocates approximately 55% to UK equities and 45% to overseas company shares. The overseas portion is actively managed against an internal composite benchmark set by the M&G Treasury & Investment Office (T&IO). Using a "fund of funds" approach, it combines stock selection and asset allocation to target annual outperformance of 1% over a rolling 3 years, before charges. Derivatives may be used for efficient portfolio management.
Despite its targeted strategy, the fund has failed to achieve strong performance in comparison to its peers within the PN Global Equities sector. Over the last 1, 3, and 5 years, it delivered returns of 16.07%, 17.51%, and 31.31%, which are noticeably below the sector averages of 22.01%, 21.41%, and 57.87%, respectively.
The fund's underperformance arises largely from its heavy tilt towards UK equities, leaving it vulnerable when the UK market falters. Its broad investment across sectors like tech, healthcare, and finance, while intended to reduce risks, can backfire if key industries face headwinds. Returns have also been affected by currency fluctuations, as exchange rate shifts affect the value of international investments when converted to GBP. Combined with global market instability driven by political tensions, economic changes, and shifting monetary policies, these elements have made consistent performance a tough target for the fund.
Prudential Pension Fund Review: A Mixed Performance Record
Our review of 109 Prudential pension funds paints a varied picture—while 14 funds delivered standout performance, a significant 73.4% underperformed relative to their sector peers.
This evaluation underscores that no fund manager consistently outperforms across all aspects of performance. While Prudential offers a diverse selection of funds, including notable standouts, the success of individual options varies greatly. To achieve optimal returns, investors should focus on identifying top performing funds while steering clear of persistent underperformers.
Adopting a strategic investment approach and maintaining a diversified portfolio are essential for managing risk and achieving long-term success. As no single sector consistently outperforms, diversification across asset classes and regions is vital for ensuring stability and driving growth. Selecting best performing funds within each asset class can further boost outcomes and ensure financial security.
Smart Investing with Yodelar
There are thousands of fund options available for constructing a portfolio, but with most funds underperforming, many investors often experience disappointing returns on their investments.
At Yodelar, our portfolio development is rooted in years of exhaustive analysis of the universe of funds and managers. We consistently evaluate over 100 managers, tens of thousands of funds, and 30,000 model portfolios. This ongoing research reveals that only a small subset of funds and managers consistently outperform, with over 90% of portfolios containing chronic under-performers.
These data-driven insights inform our structured portfolio construction process, employing top-tier, proven funds within each asset class based on rigorous backtesting.
As an FCA-regulated firm, we prioritise advanced analytics to support our recommendations. Our objective is to provide independent advice and portfolio management that significantly boosts client returns through detailed research.
Book A No Obligation Call With A Yodelar Investment Adviser
Through extensive due diligence on global funds, we identify leading managers we believe are best equipped to deliver consistent outperformance. This process allows us to craft optimised portfolios designed to maximise clients' growth potential within specified risk parameters.
