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

31/03/19
to
31/03/20
31/03/20
to
31/03/21
31/03/21
to
31/03/22
31/03/22
to
31/03/23
31/03/23
to
31/03/24
Fund 6.5% 8.8% -7.5% -21.4% 4.0%
Benchmark 3.6% 9.2% -8.3% -23.2% 5.4%

Performance - to latest available quarter end

Quarter Annualised
1
2024
3 Years to
31/03/24
5 Years to
31/03/24
10 Years to
31/03/24
Fund -1.1% -8.9% -2.6% 3.0%
Benchmark -1.7% -9.5% -3.4% 2.2%

Top 10 Holdings

Stock % Weight
1½% Treasury Gilt 2047 5.36
1¾% Treasury Gilt 2049 5.26
ELECTRICITE DE FRANCE SA MTN RegS 3.84
3¼% Treasury Gilt 2044 2.24
THFC FUNDING NO 3 PLC MTN RegS 1.73
1¼ % Treasury Gilt 2041 1.70
HSBC HOLDINGS PLC MTN RegS 1.30
AT&T INC MTN 1.29
GDF SUEZ MTN RegS 1.27
RL FINANCE BONDS NO 4 PLC RegS 1.23
Total 25.21

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 3 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 and 2 months

Photo of Mark Ellis n/a

Fund Overview

Daily price (23/05/2024) 268.90
Fund size (30/04/2024) £111.75m
Underlying Fund size £1009.11m
Number of holdings 206
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 45.93%
  International Bonds 33.69%
  UK Gilts 17.05%
  Cash and Equivalents 1.80%
  International Equities 0.00%
  Alternative Trading Strategies 0.00%
  Other Assets 1.52%

Commentary

Performance as at Q1 2024 - In the UK, inflation continues to be on a downward trajectory with the latest CPI figures at 3.4%, down from 4% as at the start of the year, levels which were last seen in 2021. The Bank of England held rates steady at 5.25% and with inflation levels remaining above the target of 2%, markets are now pricing in less rate cuts over the course of 2024 which saw Gilt yields increase across the curve. Higher borrowing cost have also impacted the UK housing sector, with house prices remaining flat and rent levels generally increasing as landlords look to pass on higher costs on to tenants. Sales in the retail sector proved to be stronger than expected and remained similar to that of January 2024 which is a positive sign for the UK economy despite being in a recession. Elsewhere in the UK, political uncertainty remains with Rishi Sunak continuing to face pressures from opposing parties and the public on setting a General Election date, which has to take place by the 28th of January 2025. During the first quarter, higher US inflation prints and more hawkish comments from the Fed combined with the positive growth data (US economy was shown to have grown at +3.4% in Q4 23), have provided a major boost to the S&P 500 (+10.6%), saw HY credit spreads tightening, and oil prices rising (Brent crude +13.6% on the quarter to $87.48/bbl). Eurozone inflation continued its downward trajectory, albeit wider reinflationary concerns saw the market price out between 70-100bps of interest rate cuts in 2024. The market is now pricing June ‘24 as the most likely timing for a first cut in the US, Europe and UK. US Treasuries (-1.0%), German Bunds (-1.4%), and UK Gilts (-1.7%) were all seen to struggle over the quarter as inflation remained persistent, and central banks pushed out the timing of rate cuts versus the start of the year. Despite the weaker period overall, March did see a more positive backdrop for sovereign bonds. Separately, March also saw two significant milestones: (i) the Bank of Japan ending their negative interest rate policy, and (ii) the Swiss National Bank being the first G10 currency to cut rates this cycle, with a 25bp cut in their policy rate to 1.50%. Q1 saw Investment Grade (IG) new issuance at record levels and strong positive market sentiment drove credit spreads tighter across markets. Spreads on EUR, GBP and US IG corporates ended the quarter 113bps (-23bps), 114 (-20bps) and 94bps (-10bps) respectively, with high beta names, cyclicals and financials being the outperformers. However, given the scaling back of rate cut expectations government bond yields moved higher, leading to more muted total returns during the quarter with EUR, GBP and US IG corporates delivering +0.4%, +0.2% and -0.1% respectively (local ccy). All in yields remain historically high, offering a positive real yield for investors (EUR 3.6%, GBP 5.2%, USD 5.4%). High Yield (HY) credit fared similarly. Spread tightening (-38bps) helped the European HY credit market deliver gains of +1.7% over the quarter, with the shorter dated nature of the index negating the impact of higher rates. Most sectors delivered solid performance in March. Q1 was the busiest quarter for HY issuance in over 2 years, however, the pace moderated during March and is expected to continue along this trajectory going forward.

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 45.93%
  International Bonds 33.69%
  UK Gilts 17.05%
  Cash and Equivalents 1.80%
  International Equities 0.00%
  Alternative Trading Strategies 0.00%
  Other Assets 1.52%

Bond Sector Breakdown

Expand allCollapse all
Industry Supersector Sector Subsector
 
Bonds 96.67% - - -
 
Cash and Equivalents 1.80% - - -
 
Non-Classified 1.52% - - -
 
Consumer Staples 0.00% - - -
 
Personal Care, Drug & Grocery Stores - 0.00% - -
 
Personal Care, Drug & Grocery Stores - - 0.00% -
 
Food Retailers & Wholesalers - - - 0.00%
 
Alternative Trading Strategies 0.00% - - -
 
Alternative Trading Strategies - 0.00% - -
 
Alternative Trading Strategies - - 0.00% -
 
Alternative Trading Strategies - - - 0.00%

Regional Allocation

pie chart
  UK 62.98%
  Developed Europe - Excl UK 16.97%
  Non-Classified 8.33%
  North America 7.40%
  Cash and Equivalents 1.80%
  South & Central America 1.52%
  Australia & New Zealand 1.00%

Fixed Interest Currencies

pie chart
  Pound Sterling 91.72%
  US Dollar 3.05%
  Euro 1.91%
  Cash 1.80%
  Non-Fixed Interest Assets 1.53%

Regional Breakdown

Expand allCollapse all
Region Country
 
UK 62.98% -
 
United Kingdom - 62.98%
 
Developed Europe - Excl UK 16.97% -
 
France - 8.23%
 
Netherlands - 3.09%
 
Luxembourg - 2.24%
 
Denmark - 1.31%
 
Sweden - 1.29%
 
Germany - 0.48%
 
Finland - 0.20%
 
Norway - 0.13%
 
Non-Classified 8.33% -
 
North America 7.40% -
 
United States - 7.40%
 
Cash and Equivalents 1.80% -
 
South & Central America 1.52% -
 
Mexico - 1.52%
 
Australia & New Zealand 1.00% -
 
Australia - 1.00%

Breakdown By Market Cap (%)

Non-Classified
 
 
1.52%
Bonds
 
 
96.67%
Cash
 
 
1.80%

Fixed Interest Maturity Profile

< 5Yr Maturity
 
 
1.23%
5Yr - 10Yr Maturity
 
 
1.03%
10Yr - 15Yr Maturity
 
 
5.96%
> 15Yr Maturity
 
 
88.45%
Cash And Equivalents
 
 
1.80%
Unknown Maturity
 
 
1.52%

Fixed Interest Quality Profile

AAA
 
 
1.16%
AA
 
 
21.53%
A
 
 
25.85%
BBB
 
 
37.53%
Sub-Investment Grade
 
 
0.94%
Unknown Quality
 
 
9.67%
Cash and Equivalents
 
 
1.80%
Other Asset Types
 
 
1.53%

Top 10 Holdings

Stock % Weight Sector Country
1 1½% Treasury Gilt 2047 5.36% Bonds United Kingdom
2 1¾% Treasury Gilt 2049 5.26% Bonds United Kingdom
3 ELECTRICITE DE FRANCE SA MTN RegS 3.84% Bonds France
4 3¼% Treasury Gilt 2044 2.24% Bonds United Kingdom
5 THFC FUNDING NO 3 PLC MTN RegS 1.73% Bonds United Kingdom
6 1¼ % Treasury Gilt 2041 1.70% Bonds United Kingdom
7 HSBC HOLDINGS PLC MTN RegS 1.30% Bonds United Kingdom
8 AT&T INC MTN 1.29% Bonds United States
9 GDF SUEZ MTN RegS 1.27% Bonds France
10 RL FINANCE BONDS NO 4 PLC RegS 1.23% 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
Sector ABI 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 2.53
Beta 0.99
Sharpe -0.02
Standard Deviation 16.67
Info Ratio 0.73

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.