<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 22, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>No redemption rush by Prudential fund investors
By SIOW LI SEN
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PRUDENTIAL structured product investors have been on a roller coaster ride but it seems many continue to keep the faith, hoping they will get back their money when the funds mature.
Buffeted by the financial crisis, Prudential Yield 15/20 and Pru 3Plus have seen wild swings in their prices with one losing as much as 86 per cent in February this year before rebounding somewhat.
United Overseas Bank, HSBC, Maybank, Hong Leong Finance, Financial Advisers and Prudential Assurance Company Ltd Singapore (PACS) were the distributors of the funds.
UOB, HSBC and Maybank have told BT that they have not received any requests from customers for a redemption offer while PACS said that not many have asked for a redemption offer similar to that given by industry rival Great Eastern (GE).
Prudential Asset Management Singapore (PAMS) manages the five-year Yield 15/20 and three-year Pru 3Plus funds. Yield 20 is denominated in US dollars.
'We are monitoring developments closely and will continue to update our distributors accordingly,' said a PAMS spokeswoman on whether it is considering making a redemption offer at the original purchase price.
The funds are designed to operate for a fixed term, and if investors choose to realise their investments before the end of the fixed-term period, the price will be based on the prevailing net asset value (NAV) per unit, which can vary according to market movements, she said.
Sales of Yield 15, launched in June 2005 with an annual payout of 3 per cent, was $267 million.
This has fallen to $156.8 million as at Aug 31 due to a drop in NAV and redemptions made since 2005. The amount of redemptions totalled 16.91 per cent of the fund's units.
To give customers more flexibility, the redemption period was changed to weekly from monthly on June 19 this year.
Sales of Pru 3Plus, launched last year with an annual 3.2 per cent payout, came to $35 million and stood at $18 million as at Aug 31 due to a drop in NAV and redemptions. The amount of redemptions totalled 1.1 per cent of the fund's units.
PACS sold Yield 15 to 164 customers. No Yield 20 product was sold by Prudential Singapore, said Ong I Ling, PACS manager for corporate communications. PACS sold PRU 3Plus to 265 customers.
While the prices of the funds have plummeted, there has not been unusual redemption requests, she said. 'Customers do redeem their investments or surrender their policies on any usual business day for a variety of reasons.'
There was no significant increase in redemption due to GE's GreatLinkChoice (GLC) offer, she added. 'We did not receive any formal customer requests for a redemption offer on their investments similar to what GE did for GLC.'
In July, GE offered to redeem GLC products at the original purchase price after the diminished value of the complex products caused anxiety to some 18,000 investors. GE was the sold distributor of the GLC products.
At the end of July, the values of the GLC plans, which are linked to a class of complex financial instruments, had plunged by between 27 and 77 per cent.
Yield 15/20 and Pru 3Plus investors would have similar anxious moments given the wild swings of the prices of the funds.
Yield 15 as at Sept 11 was valued at $0.734, rebounding from its March 31 low of $0.3750. As at Aug 31, Pru 3Plus was priced at $0.508, up from its Feb 27 low of $0.1410.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>No redemption rush by Prudential fund investors
By SIOW LI SEN
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>PRUDENTIAL structured product investors have been on a roller coaster ride but it seems many continue to keep the faith, hoping they will get back their money when the funds mature.
Buffeted by the financial crisis, Prudential Yield 15/20 and Pru 3Plus have seen wild swings in their prices with one losing as much as 86 per cent in February this year before rebounding somewhat.
United Overseas Bank, HSBC, Maybank, Hong Leong Finance, Financial Advisers and Prudential Assurance Company Ltd Singapore (PACS) were the distributors of the funds.
UOB, HSBC and Maybank have told BT that they have not received any requests from customers for a redemption offer while PACS said that not many have asked for a redemption offer similar to that given by industry rival Great Eastern (GE).
Prudential Asset Management Singapore (PAMS) manages the five-year Yield 15/20 and three-year Pru 3Plus funds. Yield 20 is denominated in US dollars.
'We are monitoring developments closely and will continue to update our distributors accordingly,' said a PAMS spokeswoman on whether it is considering making a redemption offer at the original purchase price.
The funds are designed to operate for a fixed term, and if investors choose to realise their investments before the end of the fixed-term period, the price will be based on the prevailing net asset value (NAV) per unit, which can vary according to market movements, she said.
Sales of Yield 15, launched in June 2005 with an annual payout of 3 per cent, was $267 million.
This has fallen to $156.8 million as at Aug 31 due to a drop in NAV and redemptions made since 2005. The amount of redemptions totalled 16.91 per cent of the fund's units.
To give customers more flexibility, the redemption period was changed to weekly from monthly on June 19 this year.
Sales of Pru 3Plus, launched last year with an annual 3.2 per cent payout, came to $35 million and stood at $18 million as at Aug 31 due to a drop in NAV and redemptions. The amount of redemptions totalled 1.1 per cent of the fund's units.
PACS sold Yield 15 to 164 customers. No Yield 20 product was sold by Prudential Singapore, said Ong I Ling, PACS manager for corporate communications. PACS sold PRU 3Plus to 265 customers.
While the prices of the funds have plummeted, there has not been unusual redemption requests, she said. 'Customers do redeem their investments or surrender their policies on any usual business day for a variety of reasons.'
There was no significant increase in redemption due to GE's GreatLinkChoice (GLC) offer, she added. 'We did not receive any formal customer requests for a redemption offer on their investments similar to what GE did for GLC.'
In July, GE offered to redeem GLC products at the original purchase price after the diminished value of the complex products caused anxiety to some 18,000 investors. GE was the sold distributor of the GLC products.
At the end of July, the values of the GLC plans, which are linked to a class of complex financial instruments, had plunged by between 27 and 77 per cent.
Yield 15/20 and Pru 3Plus investors would have similar anxious moments given the wild swings of the prices of the funds.
Yield 15 as at Sept 11 was valued at $0.734, rebounding from its March 31 low of $0.3750. As at Aug 31, Pru 3Plus was priced at $0.508, up from its Feb 27 low of $0.1410.
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