Thoughts on work pension fund?

Deleted_User wrote: »

@Linton I'm about to switch to the 'Capita Active Global Equity Fund S3' but I wondered if you could help me understand if the 'Atlas Multi Asset Portfolio 1 s3' might be better...

The two fund sheets are:

http://factsheets.financialexpress.net/ZCPBF/ATLAS3_NFTW.pdf

http://factsheets.financialexpress.net/ZCPBF/ATLAS3_MJMD.pdf

Thank you

The Capita (C) fund was launched a year ago and the Multi-Asset (MA) fund 2 years ago so there is insufficient data to say anything about the long term performance. I cant find the Multi Asset fund in Trustnet so all one has to go on is the underlying asset allocation given in the information sheets which is far from complete.

The key points I pick up from the information sheets are:
1) MA has a much higher UK allocation than C, both are higher than in a World Tracker
2) MA has a much lower US allocation than C, both are lower than in a World Tracker
3) MA has a lower EM/Asia Pac allocation than C, C is higher than a World Tracker, MA perhaps much the same
4) MA Small Companies allocation is probably much the same as a World Tracker. C's is significantly higher.
5) C is 100% equity, MA has about 10% bonds

A difficult choice. MA seems somewhat staid with its high UK allocation and reliance on global multinational companies. C is a more "interesting" with a better chance of higher returns from its higher risk constituents. On the other hand I suspect that these riskier constituents would provide better diversification than the more highly correlated large companies found in MA. The low US allocation in MA seems odd considering the conventional nature of its other investments. I dont think the 10% bond allocation in MA is a significant factor.

Personally, were I in my mid 30's I would go for C. Other people may worry more about the risk.

Any of those options are perfectly good ones, as is splitting it between two. I would go for the Capita Passive Global Equity Fund because the other one has a very large weighting in the UK (45%) but that's purely a preference and the other one is unlikely to be disastrous.

Personally I would avoid the active fund because with 0.72% fund charges plus the charges for the funds it invests in on top, it is going to be very expensive. But if you believe in active management then it's your pension. There is however no evidence that active managers can be expected to deliver higher returns than passive funds in the long term.