The Prudential Equity Fund delivers top quartile performance over 10 years

The Prudential Equity Fund recently celebrated its tenth birthday, making it one of the few funds to have a track record this long. In addition, the Prudential Equity Fund is the only general equity unit trust fund to have, for all periods greater than 1 year, consistently delivered top quartile* performance. It is one of the top 3 equity funds over the 10 year period to the end of December 2009.**

From its inception on the 2 August 1999, the Prudential Equity Fund set out to provide investors with broadly based exposure to shares, which offer value and medium - to long-term growth prospects. The Fund aims to invest in shares that which are undervalued relative to their sector, earnings and growth potential. The Fund’s benchmark is to out-perform the mean of its General Equity Unit Trust category. Over the last 10 years, the Prudential Equity Fund has therefore more than lived up to its promise to provide consistently good long-term returns to investors.

Gary Quinn, recently appointed Head of Equities at Prudential Portfolio Managers has managed the Fund since its inception and is assisted by Chris Wood. Quinn says, “We are very pleased to have achieved the milestone of the Fund’s 10^th birthday, but more importantly looking back over the 10 years, this track record gives our investment philosophy credibility and reassures us that our unchanging investment approach delivers consistent results.”

Quinn says that two important lessons he has learned is that: “You can never underestimate the power of compounding to grow your real wealth over time, and that you should not be afraid to trust your conviction in temporarily under-performing holdings where you are confident of your analysis .”

According to Quinn, “When we buy a share, we need to have the discipline to give it time and a chance for the idea to work. This also applies to our investors: in order to create real long-term wealth, they need to remain invested in the Fund for long enough to benefit from our approach”.

Investors in the Fund have benefited from an annualised return of 20.7% per year since inception, which in Rand terms means that if you had invested R100 in the Fund on 2 August 1999, at the end of December 2009 it would have grown to R709.00. **

While Quinn is very happy with this achievement, he acknowledges, “Our Equity Fund is but one of a range of benchmark-beating unit trusts on offer from Prudential. Prudential Portfolio Managers was, for the third year in a row recently named one of the top two investment management companies in South Africa.”

The Personal Finance Raging Bull “Domestic Management Company of the Year” awards recognise the stars of the unit trust industry in terms of outright and risk-adjusted performance, as well as the best unit trust management companies. The awards cover domestic and offshore funds, based on an assessment of the overall performance of the range, taking into account performance, risk-management, and consistency.

Bernard Fick, Chief Executive of Prudential Portfolio Managers, South Africa commented, “We are pleased with the exceptional track record of our Equity Fund, particularly the consistency of these results over such a long period of time. It provides tangible and irrefutable evidence of the success of our prudent value approach to investing. With this approach, we don’t take unnecessary risks with investor money; instead, we would rather incrementally accumulate real wealth for our clients by applying our disciplined approach to investment.”

* In the investment industry, quartiles are a popular way to measure performance of a fund relative to its peers. If the number of values of ranked data (in this case, fund returns) is divided into four equal parts, then the points that mark each division are known as quartiles. For any set of performance figures, the top quartile is the point in the data set below which 75% of the funds’ performance lies. In other words, the Prudential Equity Fund has, for all periods greater than 1 year (i.e., 2, 3, 4, 5, 6, 7, 8, 9,10) consistently been placed in the top 25% of Equity Funds.

** Source: Morningstar, figures to end December 2009

The Prudential Equity Fund track record