Finance and Capital Management

Customer perspective 1 Smoothing mechanism and Unit Price Adjustments ¹ in theory In theory Illustrative example 1 The smoothed unit price increases each day in line with the EGR less Charges 2 Unsmoothed unit price is below (above) the lower (upper) smoothing limit Smoothed unit price Unsmoothed unit price² Upper smoothing limit 3 Smoothed unit price is adjusted to narrow the gap 4 When exiting PruFund, the difference between the Smoothed and Unsmoothed Price accrues to the With- Profits Fund Estate Lower smoothing limit 1. Smoothing mechanism can be temporarily suspended in exceptional circumstances to protect the With-Profits Fund; if it is suspended, the smoothed unit price of the affected fund is set equal to the unsmoothed price 2. The unsmoothed price increases or decreases each day in line with the performance for the underlying assets in the With-Profits Fund less the pro-rated Annual Charges 45

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