Review of Prudential Investment Linked Funds

Somewhere in February 2013, I posted a review on insurance investment linked funds entitled "The Many Varieties of Takaful's Investment Linked Funds. It took me another 2 months to post another review and this time I will be looking into investment linked funds from the 2nd largest insurance company in Malaysia.

No prizes for those who have guessed Prudential correctly!

Prudential's Investment Linked Funds are called PRUlink funds. In total there are 12 PRUlink funds out of which 6 are investing purely in Malaysia and the remaining 6 invested globally.

List of PRUlink Funds investing locally (Malaysia)

1. PRUlink Bond Fund
2. PRUlink Equity Fund
3. PRUlink Managed Fund II
4. PRUlink Dana Aman Fund
5. PRUlink Dana Unggul Fund
6. PRUlink Dana Urus II Fund

List of PRUlink Fund investing globally

1. PRUlink Asia Equity Fund
2. PRUlink Asia Local Bond Fund
3. PRUlink Asia Managed Fund
4. PRUlink Asia Property Securities Fund
5. PRUlink Dragon Peacock Fund
6. PRUlink Global Market Navigator Fund

Review of PRUlink Local Funds:

1) PRUlink Bond Fund

• Investment Strategy: Invest in a portfolio of fixed income securities, corporate bonds and fixed deposits
• Asset Allocation: Up to 100% in fixed income securities, corporate bonds and fixed deposits. The balance of the asset will be invested in liquid assets. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +1.05%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

2) PRUlink Equity Fund

• Investment Strategy: Invests principally in a diversified portfolio of equities and equity-related securities
• Asset Allocation: Up to 100% in high quality share listed on Bursa Malaysia. The balance of the asset will be invested in liquid assets.
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +1.13%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

3) PRUlink Managed Fund II

• Investment Strategy: Invest in shares and fixed interest securities through PRUlink equity fund and PRUlink bond fund and in any other PRUlink funds that may become available in the future.
• Asset Allocation: Between 70% to 90% of the assets will be invested in shares through PRUlink equity fund or any other PRUlink funds, which invests in shares, which may become available in the future. Between 10% to 30% of the assets will be invested in fixed interest securities through PRUlink bond fund or any other PRUlink funds, which invests in fixed interest securities, which may become available in the future.
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +0.96%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

4) PRUlink Dana Aman

• Investment Strategy: Invest in selected Islamic debt securities and fixed deposits
• Asset Allocation: Up to 100% in Shariah compliant Malaysian fixed income instruments. The balance of the asset will be invested in Shariah compliant liquid assets. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: YES
• Fund Performance (1st Jan 2013 - 10th April 2013): +1.05%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

5) PRUlink Dana Unggul

• Investment Strategy: Invests principally in a diversified portfolio of Shariah-approved equities and equity-related securities that are undervalued and have good growth potential.
• Asset Allocation: Up to 100% in high quality Shariah-approved shares listed on Bursa Malaysia. The balance of the asset will be invested in Shariah compliant liquid assets. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: YES
• Fund Performance (1st Jan 2013 - 10th April 2013): +0.19%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

6) PRUlink Dana Urus II

• Investment Strategy: To maximise returns over medium to long term by investing in Shariah-approved shares and Islamic debt securities through PRUlink dana unggul and PRUlink dana aman and in any other such PRUlink funds that may become available in the future. The neutral asset allocation ratio is 80% and 20% with allowable movement from the benchmark of +/- 10%
• Asset Allocation: Between 70% to 90% of the assets will be invested in Shariah-approved shares through PRUlink dana unggul or any other PRUlink funds, which invests in Shariah-approved shares, which may become available in the future. Between 10% to 30% of the assets will be invested in Islamic debt securities through PRUlink dana aman or any other PRUlink funds, which invests in Islamic debt securities, which may become available in the future.
• Fund Manager: Eastspring Investment
• Syariah Compliant: YES
• Fund Performance (1st Jan 2013 - 10th April 2013): +0.30%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

Review of PRUlink Global Funds:

1) PRUlink Asia Equity Fund

• Investment Strategy: The fund achieves its objective by investing in a collective investment scheme primarily the Eastspring Investments – Asian Equity Fund managed by Eastspring Investments (Singapore) Limited. The PRUlink Asia equity fund may invest in any other funds or sub-funds managed by Eastspring Investments (Singapore) Limited or any other fund managers to be determined from time to time.
• Asset Allocation: 100% into the Eastspring Investments–Asian Equity Fund managed by Eastspring Investments (Singapore) Limited.
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): -6.10%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns (based on returns of the mother fund which is Eastspring Investments-Asian Equity Fund, Singapore):

2) PRUlink Asia Local Bond Fund

• Investment Strategy: Invest in a diversified portfolio consisting primarily of fixed income or debt securities that are rated as well as unrated through a collective investment scheme primarily the Eastspring Investments – Asian Local Bond Fund, incorporated in Luxembourg.
• Asset Allocation: 100% into the Eastspring Investments – Asian Local Bond Fund managed by Eastspring Investments (Singapore) Limited. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +0.41%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

3) PRUlink Asia Managed Fund

• Investment Strategy: Investing in shares, fixed interest securities and money market instruments in the Asia Pacific ex Japan region primarily through a collective investment scheme primarily the Eastspring Investments – Asian Equity Fund and Eastspring Investments – Asian Bond Fund 
• Asset Allocation: Between 60% to 80% of the assets will be invested in Eastspring Investments –Asian Equity Funds and between 20% to 40% of the assets will be invested in the Eastspring Investments – Asian Bond Fund. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): -4.15%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

4) PRUlink Asia Property Securities Fund

• Investment Strategy: Invest in listed Real Estate Investment Trusts (REITs), property related securities of companies, depository receipts including American Depository Receipts (ADR) and Global Depository Receipts (GDR), debt securities convertible into common shares, preference shares and warrants, which are incorporated, listed or have their area of primarily activity in the Asia Pacific region including Japan, Australia and New Zealand through a collective investment scheme primarily the Eastspring Investments – Asian Property Securities Fund.
• Asset Allocation: 100% into the Eastspring Investments – Asian Property Securities Fund managed by Eastspring Investments (Singapore) Limited. 
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +7.13%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

5) PRUlink Dragon Peacock Fund

• Investment Strategy: Invest in equity and equity-related instruments of corporations through a collective investment scheme primarily the Eastspring Investments – Dragon Peacock Fund, incorporated in Luxembourg. The equity and equity-related securities may include, but are not limited to, listed securities in the Recognised Markets, depository receipts including American Depository Receipts (ADR) and Global Depository Receipts (GDR), debt securities convertible into common shares, preference shares and warrants. (Area of investment in China and India)
• Asset Allocation: 100% into the Eastspring Investments – Dragon Peacock Fund managed by Eastspring Investments (Singapore) Limited.
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): -8.83%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

6) PRUlink Global Market Navigator Fund

• Investment Strategy: Invest in a diversified range of global assets including cash, equities, bonds, and currencies through a collective investment scheme primarily the Eastspring Investments – Global Market Navigator Fund, incorporated in Luxembourg.
• Asset Allocation: 100% into the Eastspring Investments - Global Market Navigator Fund managed by Eastspring Investments (Singapore) Limited.
• Fund Manager: Eastspring Investment
• Syariah Compliant: NO
• Fund Performance (1st Jan 2013 - 10th April 2013): +1.26%
• Annualized Average Returns for 1 Year, 3 Year (Annualized) and 5 Yer (Annualized):

• Actual Annual Returns:

Summary of Funds

Shown below is the table of summary containing all 12 PRUlink funds:-

Type of Fund	Risk Level	Shariah Compliant	1 Year Return	3 Year Return*	5 Year Return*
Local Funds
PRUlink Bond Fund	Low	NO	3.97%	5.10%	4.79%
PRUlink Equity Fund	High	NO	8.81%	10.83%	10.25%
PRUlink Managed Fund II	Medium	NO	6.87%	8.52%	8.16%
PRUlink Dana Aman Fund	Low	YES	4.47%	5.31%	4.76%
PRUlink Dana Unggul Fund	High	YES	10.94%	12.02%	9.80%
PRUlink Dana Urus II Fund	Medium	YES	9.54%	10.59%	8.83%
Global Funds
PRUlink Asia Equity Fund	High	NO	-2.88%	-	-
PRUlink Asia Local Bond Fund	Low	NO	6.84%	5.48%	-
PRUlink Asia Managed Fund	Medium	NO	0.57%	1.45%	0.83%
PRUlink Asia Property Securities Fund	Medium	NO	32.49%	16.34%	2.29%
PRUlink Dragon Peacock Fund	High	NO	-3.62%	-6.03%	-
PRUlink Global Market Navigator Fund	Low	NO	9.27%	2.28%	-

As you can see PRUlink funds are managed entirely by their own investment body, Eastspring Investment Sdn. Bhd. It comes as no surprise that PRUlink's local funds are doing exceedingly well under the management of Eastspring.

Why so?

FYI, Eastspring's unit trust fund (Dana Ilham) recently won the Lippers award for best Islamic Malaysia equity fund under the 3 and 10 Year Category. 

Opportunity for Investment?

One must always remember that we should not treat PRUlink funds as an opportunity for profit gains. The main purpose of these funds are to generate additional compounded gains which would later be used to counter/pay off the increase in our insurance premium as we get older. 

One problem many insurance buyers faced is not knowing what funds have been selected by their insurance agents to invest in. The general practice by many insurance agents is to allocate percentages of your contribution to different funds. For example your Prudential insurance agent might automatically allocated the following:

• 20% to Low Risk PRUlink Bond Fund
• 30% to High Risk PRUlink Equity Fund
• 30% to Medium Risk PRUlink Managed Fund II
• 20% to High Risk PRUlink Dragon Peacock Fund

In other words, the insurance agent would normally diversify your contribution to ensure that there will be some form of gain in the long run. As a client, you have the right to request which fund you would like your money to be invested in (pick from the performance table above). Some might feel that having their contribution split equally between two funds such as PRUlink Equity Fund and PRUlink Dana Urus II Fund is a risk worth taking in return for higher returns. Other might feel that pure equity funds is too risky as an insruance linked investment. Whatever the choice you make, know that you have every right to so.

Last but not least, before deciding to switch between PRUlink funds, do find out from your insurance agent with regards to charges incurred such as switching fee, entry fee and exit fee. In most cases, switchi

Check out PRUlink Fund Daily Price HERE

Cheers and Happy Investing!

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