Prudential Long Dated Corporate Bond S3

Essentials Portfolio Analysis Background Data Investment Risk Prudential Risk Performance View PDF Factsheet
Portfolio data accurate as at:

Performance

Discrete performance - to latest available quarter end

31/12/18
to
31/12/19
31/12/19
to
31/12/20
31/12/20
to
31/12/21
31/12/21
to
31/12/22
31/12/22
to
31/12/23
Fund 18.9% 16.2% -5.4% -32.4% 8.6%
Benchmark 17.4% 14.8% -5.8% -34.4% 10.6%

Performance - to latest available quarter end

Quarter Annualised
4
2023
3 Years to
31/12/23
5 Years to
31/12/23
10 Years to
31/12/23
Fund 14.7% -11.4% -0.8% 3.4%
Benchmark 15.1% -11.9% -1.6% 2.7%

Top 10 Holdings

Stock % Weight
1¾% Treasury Gilt 2049 5.89
1½% Treasury Gilt 2047 5.35
ELECTRICITE DE FRANCE SA MTN RegS 3.69
3¼% Treasury Gilt 2044 2.93
THFC FUNDING NO 3 PLC MTN RegS 1.74
1¼ % Treasury Gilt 2041 1.71
HSBC HOLDINGS PLC MTN RegS 1.35
AT&T INC MTN 1.33
GDF SUEZ MTN RegS 1.29
RL FINANCE BONDS NO 4 PLC RegS 1.26
Total 26.54

Fund Aims

Objective: The investment strategy of the fund is to purchase units in the M&G PP Long-Dated Corporate Bond Fund - the underlying fund.

Underlying Fund Objective: The fund invests mainly in high quality sterling corporate bonds with over 15 years to maturity. The fund is actively managed against its benchmark, the iBoxx sterling Over 15 Years Non-Gilts Index. The fund may also hold UK government gilts and limited amounts of high yield and hedged non-sterling corporate bonds. Derivative instruments may be used for efficient portfolio fund management.

Performance Objective: To outperform the benchmark by 0.80% a year (before charges) on a rolling three year basis.

Fund Manager

Jamie Hamilton manager of the underlying fund for 23 years and 1 months

Photo of Jamie Hamilton Jamie Hamilton joined Prudential Group in 2001 as a fund manager in the fixed income team managing a range of institutional corporate bond funds. Prior to joining M&G, Jamie worked for Dresdner RCM Global Investors as a fixed income fund manager, managing corporate bond funds. Jamie graduated from Newcastle University with a degree in economics and is a chartered financial analyst (CFA) charterholder.

Mark Ellis manager of the underlying fund for 10 years

Photo of Mark Ellis n/a

Fund Overview

Daily price (26/03/2024) 274.50
Fund size (29/02/2024) £125.21m
Underlying Fund size £1043.76m
Number of holdings 211
Annual Management Charge (AMC) Please refer to the "Fund Guide"
for your specific pension plan
Launch date 01/07/2003

Asset Allocation

pie chart
  UK Corporate Bonds 45.40%
  International Bonds 33.31%
  UK Gilts 18.42%
  Cash and Equivalents 1.80%
  Other Assets 1.07%

Commentary

Performance as at Q4 2023 - The quarter began with concerns over geopolitical risk following conflict in the Middle East. Economic data continued to come in relatively strong adding to fears of higher rates for longer. November and December saw a major rally in markets on hopes of a soft landing and central bank cuts. In the UK Consumer Price Index slowed to 3.9%,. Core inflation fell to 5.1%. Whilst monetary policy is having the desired effect on inflation, there are concerns around the UK heading into a technical recession. Markets expect the Bank of England to cut rates in 2024. Rates are also impacting UK house prices which suffered in 2023. As we enter 2024, the UK is expected to have a general election which may cause volatility in markets. The November and December rally was triggered by less aggressive tones from the Federal Open Markets Committee, followed by the Federal Reserve's (Fed) December dot plot which took investors by surprise with 75bps of rate cuts being signalled. In turn investors' expectations for inflation returning to target without a recession grew. Europe saw a similar story and European Central Bank cuts being largely priced in by April 2024. Inflation continues to trend in the right direction, reflecting the decline in the money supply. However the path back to target will not be straightforward with wages continuing to add to inflationary pressure. We may also see some Fed push back given that the rally has loosened financial conditions. The backdrop resulted in the Bloomberg Global Bond Aggregate Index gaining +5.0% in November and +4.2% in December. The rally reversed the trajectory for fixed income in 2023 where at the end of September portions of the fixed income market were facing the prospect of a third successive year of negative returns. Investment Grade (IG) credit performed strongly. The spread on the Global IG index tightened, with high beta names, cyclicals, financials and BBBs being the outperformers. Total returns for EUR, GBP and US IG corporates were +5.5%, +7.4% and +7.9% respectively. All in yields remain historically high, offering a positive real yield. High Yield (HY) credit fared similarly. Lower sovereign bond yields and spread tightening helped the Global HY credit market deliver gains, bringing total returns to +12.5%. On an annual basis, US HY +13.5% slightly outperformed European HY, predominantly driven by its marginally longer duration. Whilst there has been talk of soft landings there is always the spectre of an unforeseen event which could spark future bond market volatility or a sharp turn in monetary policy. There are a significant number of elections coming in 2024. We believe that a patient and highly selective approach to fixed income investment is the best strategy to take advantage of opportunities. The fund underperformed its benchmark. The following factors contributed: Sector selection was a detractor driven by the fund's underweight position in the Industrial sector. Security selection was a detractor. Overweight positions in Utility bonds were positive. In addition underweight positions British American Tobacco and GlaxoSmithKline were detractors. Strategy - the manager reduced the level of risk as credit spreads tightened. The manager sold names such as ENGIE, Cadent, SSE and Intesa Sanpaolo andreduced the fund's exposure to RAC. In addition, USD bonds issued by Pfizer and Euro bonds issued by Medtronic were sold. The manager took profits on names within the Real Estate sector. They switched out of GBP holdings in CPI Property Group into Euro bonds of the same company with a slightly longer maturity. The proceeds were used to add to exposure to Heimstaden Bostad, SBB and GreenSquareAccord. The manager continued to find some value in the utility sector and were still able to identify opportunities within financials and purchased senior bonds issued by Lloyds. In addition, they purchased Euro denominated bonds issued by German banks.

Source: M&G

Important Information

Because of changes in exchange rates the value of your investment, as well as any money you take from it, can go down as well as up.

Some funds may invest in ‘underlying’ funds or other investment vehicles. The performance of our fund, compared to what it’s invested in won’t be exactly the same. That can be due to additional charges, cash management (needed to help people to enter and leave our fund when they want), tax and the timing of investments (this is known as a fund’s dealing cycle, it varies between managers and can be several days).

Source of portfolio data: Broadridge. Source of performance data: FE fundinfo. We can’t predict the future. Past performance isn’t a guide to future performance. The figures shown are intended only to demonstrate performance history of the fund, after allowing for the impact of fund charges and further costs, but take no account of any Annual Management Charge paid for by the deduction of units. Charges and further costs may vary in the future and may be higher than they are now. Fund performance is based upon the movement of the daily price and is shown as total return in GBP with gross income reinvested. The value of your client’s investment can go down as well as up and the amount your client gets back may be less than they put in.

This factsheet is intended for the advisers of occupational pension schemes using Prudential group pension contracts and Prudential grouped personal pensions and Stakeholder pension contracts. its purpose is to provide an insight into how investment markets and funds have performed over the period and is provided for information only. You should refer to your client's scheme documentation (e.g. Fund Guide) for fund availability, investment strategy, any scheme information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this infomation or make any warranties regarding results from its usage.

Portfolio data accurate as at:

Asset Allocation

pie chart
  UK Corporate Bonds 45.40%
  International Bonds 33.31%
  UK Gilts 18.42%
  Cash and Equivalents 1.80%
  Other Assets 1.07%

Bond Sector Breakdown

Expand allCollapse all
Industry Supersector Sector Subsector
 
Bonds 97.13% - - -
 
Cash and Equivalents 1.80% - - -
 
Non-Classified 1.07% - - -

Regional Allocation

pie chart
  UK 63.83%
  Developed Europe - Excl UK 17.35%
  Non-Classified 7.34%
  North America 7.18%
  Cash and Equivalents 1.80%
  South & Central America 1.53%
  Australia & New Zealand 0.98%

Fixed Interest Currencies

pie chart
  Pound Sterling 91.84%
  US Dollar 3.05%
  Euro 2.24%
  Cash 1.80%
  Non-Fixed Interest Assets 1.07%

Regional Breakdown

Expand allCollapse all
Region Country
 
UK 63.83% -
 
United Kingdom - 63.83%
 
Developed Europe - Excl UK 17.35% -
 
France - 8.05%
 
Netherlands - 3.01%
 
Luxembourg - 2.27%
 
Sweden - 1.33%
 
Denmark - 1.31%
 
Germany - 0.81%
 
Finland - 0.33%
 
Norway - 0.14%
 
Italy - 0.10%
 
Non-Classified 7.34% -
 
North America 7.18% -
 
United States - 7.18%
 
Cash and Equivalents 1.80% -
 
South & Central America 1.53% -
 
Mexico - 1.53%
 
Australia & New Zealand 0.98% -
 
Australia - 0.98%

Fixed Interest Maturity Profile

< 5Yr Maturity
 
 
1.32%
5Yr - 10Yr Maturity
 
 
1.45%
10Yr - 15Yr Maturity
 
 
5.33%
> 15Yr Maturity
 
 
89.03%
Cash And Equivalents
 
 
1.80%
Unknown Maturity
 
 
1.07%

Fixed Interest Quality Profile

AAA
 
 
1.19%
AA
 
 
22.41%
A
 
 
25.38%
BBB
 
 
37.85%
Sub-Investment Grade
 
 
1.08%
Unknown Quality
 
 
9.22%
Cash and Equivalents
 
 
1.80%
Other Asset Types
 
 
1.07%

Top 10 Holdings

Stock % Weight Sector Country
1 1¾% Treasury Gilt 2049 5.89% Bonds United Kingdom
2 1½% Treasury Gilt 2047 5.35% Bonds United Kingdom
3 ELECTRICITE DE FRANCE SA MTN RegS 3.69% Bonds France
4 3¼% Treasury Gilt 2044 2.93% Bonds United Kingdom
5 THFC FUNDING NO 3 PLC MTN RegS 1.74% Bonds United Kingdom
6 1¼ % Treasury Gilt 2041 1.71% Bonds United Kingdom
7 HSBC HOLDINGS PLC MTN RegS 1.35% Bonds United Kingdom
8 AT&T INC MTN 1.33% Bonds United States
9 GDF SUEZ MTN RegS 1.29% Bonds France
10 RL FINANCE BONDS NO 4 PLC RegS 1.26% Bonds United Kingdom

Important Information

Because of changes in exchange rates the value of your investment, as well as any money you take from it, can go down as well as up.

Some funds may invest in ‘underlying’ funds or other investment vehicles. The performance of our fund, compared to what it’s invested in won’t be exactly the same. That can be due to additional charges, cash management (needed to help people to enter and leave our fund when they want), tax and the timing of investments (this is known as a fund’s dealing cycle, it varies between managers and can be several days).

The Industry Classification Benchmark is a product of FTSE International Limited and has been licensed for use.

This factsheet is for investment professionals and is for information purposes only. Should you wish to present any of this content to your client, please refer to similar pages on pru.co.uk. You should refer to your client’s policy documentation and supporting brochures for fund availability, investment strategy, any product information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this information or make any warranties regarding results from its usage.

Identification Codes

Sedol Code 3373204
Mex Code PUMLDC
Isin Code GB0033732040
Citi Code P551

Fund Charges

Annual Management Charge (AMC) Please refer to the "Fund Guide"
for your specific pension plan

Aims and Benchmark

Aims Objective: The investment strategy of the fund is to purchase units in the M&G PP Long-Dated Corporate Bond Fund - the underlying fund. Underlying Fund Objective: The fund invests mainly in high quality sterling corporate bonds with over 15 years to maturity. The fund is actively managed against its benchmark, the iBoxx sterling Over 15 Years Non-Gilts Index. The fund may also hold UK government gilts and limited amounts of high yield and hedged non-sterling corporate bonds. Derivative instruments may be used for efficient portfolio fund management. Performance Objective: To outperform the benchmark by 0.80% a year (before charges) on a rolling three year basis.
Benchmark iBoxx Sterling Over 15 Years Non-Gilts Index
ABI Sector Sterling Long Bond

Important Information

Because of changes in exchange rates the value of your investment, as well as any money you take from it, can go down as well as up.

Some funds may invest in ‘underlying’ funds or other investment vehicles. The performance of our fund, compared to what it’s invested in won’t be exactly the same. That can be due to additional charges, cash management (needed to help people to enter and leave our fund when they want), tax and the timing of investments (this is known as a fund’s dealing cycle, it varies between managers and can be several days).

Charges and further costs may vary in the future and may be higher than they are now.

This factsheet is for investment professionals and is for information purposes only. Should you wish to present any of this content to your client, please refer to similar pages on pru.co.uk. You should refer to your client’s policy documentation and supporting brochures for fund availability, investment strategy, any product information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this information or make any warranties regarding results from its usage.

Risk Analysis

Ratio Value
Alpha 3.09
Beta 1.00
Sharpe -0.02
Standard Deviation 16.50
Info Ratio 0.86

Risk Factors

Risk Factor Yes / No
Charges to Capital Yes
Emerging Markets No
Concentrated Portfolio No
Smaller Companies No
High Yield Bonds Yes
Sector Specific No
Geared Investments No
Value of Investments Yes
Investments Long Term Yes
Property No
Exchange Rate No
Higher Risk No
Performance Charges No
Derivative Exposure Yes
Offshore No
Income Eroding Capital Growth No
Umbrella Liabilities No
New Fund No
Solvency of Depository Yes
Solvency of Bond Issuers Yes
Ethical Restrictions No
Liquidity No
Returns Are Not Guaranteed Yes
Inflation Yes
Taxation and Tax Relief Yes

Fund Specific Risks

Charges to Capital

Part, or all of the periodic annual management fee(s) and expenses may be charged to capital which could increase the potential for the capital value of your investment to be eroded. Your capital could also decrease if income withdrawals exceed the growth rate of the fund(s).

High Yield Bonds

The fund invests in high yield bonds. High yield bonds carry a greater risk of default than investment grade bonds, and economic conditions and interest rate movements will have a greater effect on their price. Income levels may not be achieved and the income provided may vary.

Value of Investments

The value of investments, and any income can fall, as well as rise, so you could get back less than you invested. Neither capital nor income is guaranteed.

Investments Long Term

Investments should be regarded as long term and are not suitable for money which may be needed in the short term, you should always have a sufficient cash reserve.

Derivative Exposure

The fund invests in derivatives as part of its investment strategy, over and above their use for Efficient Portfolio Management (EPM). Investors should be aware that the use of these instruments can, under certain circumstances, increase the volatility and risk profile of the Fund beyond that expected of a fund that only invests in equities. The fund may also be exposed to the risk that the company issuing the derivative may not honour their obligations which in turn could lead to losses arising.

Solvency of Depository

The value of a cash or currency fund may be affected if any of the institutions with which cash is deposited becomes insolvent or experiences other financial difficulties.

Solvency of Bond Issuers

If the fund you choose invests in bonds there is a risk that the issuer may default, resulting in a loss to the portfolio.

Returns Are Not Guaranteed

What you receive when you sell your investment is not guaranteed; it depends on how your investments perform.

Inflation

Inflation will reduce the real value of your investments in future.

Taxation and Tax Relief

Levels of taxation and tax relief are subject to change.

Important Information

Because of changes in exchange rates the value of your investment, as well as any money you take from it, can go down as well as up.

Some funds may invest in ‘underlying’ funds or other investment vehicles. The performance of our fund, compared to what it’s invested in won’t be exactly the same. That can be due to additional charges, cash management (needed to help people to enter and leave our fund when they want), tax and the timing of investments (this is known as a fund’s dealing cycle, it varies between managers and can be several days).

The risk factor definitions are provided by Broadridge. These definitions may differ from those of Prudential or any underlying fund manager. The data itself is provided by Prudential or the underlying fund manager.

This factsheet is intended for the advisers of occupational pension schemes using Prudential group pension contracts and Prudential grouped personal pensions and Stakeholder pension contracts. its purpose is to provide an insight into how investment markets and funds have performed over the period and is provided for information only. You should refer to your client's scheme documentation (e.g. Fund Guide) for fund availability, investment strategy, any scheme information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this infomation or make any warranties regarding results from its usage.

These risk ratings have been developed by Prudential to help provide an indication of a fund’s potential level of risk and reward based on the type of assets which may be held by the fund. Other companies may use different descriptions and as such these risk ratings should not be considered as generic across the fund management industry.

We regularly review our fund risk ratings, so they may change in the future. If, in our view, there is a material change in the fund's level of risk, for example due to a significant change to the assets held by the fund or in the way the fund is managed, we will provide information on the new risk rating. We recommend that you make sure you understand the risk rating of any fund before you invest.

  • Higher Risk
  • Medium to Higher Risk
  • Medium Risk
  • Lower to Medium Risk
  • Lower Risk
  • Minimal Risk

Medium Risk

These funds may invest in multi-asset strategies with a higher weighting in equities (or with significant derivative use), while funds investing mainly in property, high yield or government bonds (such as UK Gilts) are also in this category.

Help

Important Information

This factsheet is intended for the advisers of occupational pension schemes using Prudential group pension contracts and Prudential grouped personal pensions and Stakeholder pension contracts. Its purpose is to provide an insight into how investment markets and funds have performed over the period and is provided for information only. You should refer to your client's scheme documentation (e.g. Fund Guide) for fund availability, investment strategy, any scheme information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this infomation or make any warranties regarding results from its usage.

Important Information

Because of changes in exchange rates the value of your investment, as well as any money you take from it, can go down as well as up.

Some funds may invest in ‘underlying’ funds or other investment vehicles. The performance of our fund, compared to what it’s invested in won’t be exactly the same. That can be due to additional charges, cash management (needed to help people to enter and leave our fund when they want), tax and the timing of investments (this is known as a fund’s dealing cycle, it varies between managers and can be several days).

Source of performance data: FE fundinfo. We can’t predict the future. Past performance isn’t a guide to future performance. The figures shown are intended only to demonstrate performance history of the fund, after allowing for the impact of fund charges and further costs, but take no account of any Annual Management Charge paid for by the deduction of units. Charges and further costs may vary in the future and may be higher than they are now. Fund performance is based upon the movement of the daily price and is shown as total return in GBP with gross income reinvested. The value of your client’s investment can go down as well as up and the amount your client gets back may be less than they put in.

This factsheet is intended for the advisers of occupational pension schemes using Prudential group pension contracts and Prudential grouped personal pensions and Stakeholder pension contracts. Its purpose is to provide an insight into how investment markets and funds have performed over the period and is provided for information only. You should refer to your client's scheme documentation (e.g. Fund Guide) for fund availability, investment strategy, any scheme information and charges. Every care has been taken in populating this output, however it must be appreciated that neither Broadridge, Prudential nor their sources guarantee the accuracy, adequacy or completeness of this infomation or make any warranties regarding results from its usage.

Prudential is a trading name of Prudential Pensions Limited. Prudential Pensions Limited is registered in England and Wales. Registered office at 10 Fenchurch Avenue, London EC3M 5AG. Registered number 992726. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.