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    • davidmt83
    • By davidmt83 9th Jun 17, 11:15 AM
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    davidmt83
    Thoughts on work pension fund?
    • #1
    • 9th Jun 17, 11:15 AM
    Thoughts on work pension fund? 9th Jun 17 at 11:15 AM
    Hello,

    What do people think to the following pension fund?

    Target fund holdings / Funds:
    19.00% Zurich Aquila Connect US Equity Index
    16.00% Zurich Stewart Investors Global Emerging Markets Leaders
    15.00% Zurich Dimensional Global Small Companies
    11.00% Zurich Lazard European Equity Alpha
    10.00% Zurich Veritas Global Focus
    10.00% Zurich Baillie Gifford UK Equity Focus
    10.00% Zurich Schroder Specialist Value UK Equity
    5.00% Zurich Baillie Gifford Japanese
    4.00% Zurich Stewart Investors Asia Pacific Leaders

    Composite Benchmark:
    20% FTSE All Share Index
    19% FTSE USA
    16% MSCI Emerging Markets
    15% MSCI World Small Cap
    11% FTSE World Europe ex UK
    10% MSCI World
    5% FTSE Japan
    4% FTSE Asia Pacific ex Japan

    My impression is this is a global fund, investing in equities, actively managed, and as such carries relatively high risk but as I'm mid 30s this is what I'm looking for.

    Thanks
Page 1
    • Linton
    • By Linton 9th Jun 17, 11:32 AM
    • 8,188 Posts
    • 8,046 Thanks
    Linton
    • #2
    • 9th Jun 17, 11:32 AM
    • #2
    • 9th Jun 17, 11:32 AM
    Hello,

    What do people think to the following pension fund?

    Target fund holdings / Funds:
    19.00% Zurich Aquila Connect US Equity Index
    16.00% Zurich Stewart Investors Global Emerging Markets Leaders
    15.00% Zurich Dimensional Global Small Companies
    11.00% Zurich Lazard European Equity Alpha
    10.00% Zurich Veritas Global Focus
    10.00% Zurich Baillie Gifford UK Equity Focus
    10.00% Zurich Schroder Specialist Value UK Equity
    5.00% Zurich Baillie Gifford Japanese
    4.00% Zurich Stewart Investors Asia Pacific Leaders

    Composite Benchmark:
    20% FTSE All Share Index
    19% FTSE USA
    16% MSCI Emerging Markets
    15% MSCI World Small Cap
    11% FTSE World Europe ex UK
    10% MSCI World
    5% FTSE Japan
    4% FTSE Asia Pacific ex Japan

    My impression is this is a global fund, investing in equities, actively managed, and as such carries relatively high risk but as I'm mid 30s this is what I'm looking for.

    Thanks
    Originally posted by davidmt83
    Actively managed funds arent inherently riskier than passive funds operating in the same sector. In fact in some cases than can be much less risky as it may be a fund objective to avoid high volatility. Riskiness is more a factor of the sector.

    The fund looks reasonable to me investing broadly across the world using some well known funds that have a good record in their area, and using a tracker for the USA.
    • bostonerimus
    • By bostonerimus 9th Jun 17, 11:45 AM
    • 854 Posts
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    bostonerimus
    • #3
    • 9th Jun 17, 11:45 AM
    • #3
    • 9th Jun 17, 11:45 AM
    I assume this is a DC pension plan.......what are the fees you are being charged and do you have any other options?
    Misanthrope in search of similar for mutual loathing
    • davidmt83
    • By davidmt83 9th Jun 17, 11:49 AM
    • 2,286 Posts
    • 1,007 Thanks
    davidmt83
    • #4
    • 9th Jun 17, 11:49 AM
    • #4
    • 9th Jun 17, 11:49 AM
    Thanks Linton - that's very helpful.

    There's a few funds to chose from, here if you're interested / have time:

    http://webfund6.financialexpress.net/clients/zurichcp/portfoliopricetable.aspx?schemeID=240413

    2 pages - with fact sheets and past performance graphs.

    There is a passive global equity fund - would you think this was a better choice - if you've got 5 mins to check it out

    The rest of the equity funds are index tracker funds, or there is one specifically for emerging markets but I guess I'd rather leave this up to the fund manager of a global fund to pick and choose.

    Thanks for your time.
    • Linton
    • By Linton 9th Jun 17, 12:22 PM
    • 8,188 Posts
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    Linton
    • #5
    • 9th Jun 17, 12:22 PM
    • #5
    • 9th Jun 17, 12:22 PM
    I have found the Capita Passive global equity fund on the list. The fund has been going less than a year so there isnt any performance data available. It looks like it's not a global tracker but rather a set of individual country trackers, in principle much like VLS100.

    Morningstar tells me the Zurich portfolio marginally outperformed VLS100 over 1, 3 and 5 years.
    • davidmt83
    • By davidmt83 9th Jun 17, 12:45 PM
    • 2,286 Posts
    • 1,007 Thanks
    davidmt83
    • #6
    • 9th Jun 17, 12:45 PM
    • #6
    • 9th Jun 17, 12:45 PM
    Thanks Linton - yeah I think the Active and Passive funds have been going for the same amount of time. They both look to have graphs / charts going back to Oct 16. There's a few other global funds but trackers from what I can see.

    Would you split your investment between the Active and Passive funds, or would you prefer one over the other maybe due to associated charges? Or would you include other funds as well?

    Thanks
    • bostonerimus
    • By bostonerimus 9th Jun 17, 1:12 PM
    • 854 Posts
    • 428 Thanks
    bostonerimus
    • #7
    • 9th Jun 17, 1:12 PM
    • #7
    • 9th Jun 17, 1:12 PM
    Keep it simple so you can easily track the performance. I would stick with passive trackers and probably a multi asset fund, but if you want to mix active with passive trackers I'd use the trackers for big markets and the actives in smaller sectors like EM
    Misanthrope in search of similar for mutual loathing
    • Linton
    • By Linton 9th Jun 17, 1:29 PM
    • 8,188 Posts
    • 8,046 Thanks
    Linton
    • #8
    • 9th Jun 17, 1:29 PM
    • #8
    • 9th Jun 17, 1:29 PM
    Would you split your investment between the Active and Passive funds, or would you prefer one over the other maybe due to associated charges? Or would you include other funds as well?

    Thanks
    Originally posted by davidmt83
    Active versus passive is an ongoing discussion point on these forms. My view is that one should use the best tool for the job. In some areas such as broad investments in global or US large companies passive works well. In other areas like small companies, income, various niche sectors etc either there arent any satisfactory passives or actives work better. Ultimately it's the fit with the wider portfolio and long term return/ risk that matter. Charges are a secondary matter. Low charges dont make a less appropriate fund the right choice.
    • davidmt83
    • By davidmt83 9th Jun 17, 1:33 PM
    • 2,286 Posts
    • 1,007 Thanks
    davidmt83
    • #9
    • 9th Jun 17, 1:33 PM
    • #9
    • 9th Jun 17, 1:33 PM
    Active versus passive is an ongoing discussion point on these forms. My view is that one should use the best tool for the job. In some areas such as broad investments in global or US large companies passive works well. In other areas like small companies, income, various niche sectors etc either there arent any satisfactory passives or actives work better. Ultimately it's the fit with the wider portfolio and long term return/ risk that matter. Charges are a secondary matter. Low charges dont make a less appropriate fund the right choice.
    Originally posted by Linton
    Interesting - so essentially I think you're saying if you were me you'd invest in the passive global fund and not split it between funds either. Thanks for your time. I've got some thinking to do.
    • Linton
    • By Linton 9th Jun 17, 1:50 PM
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    Linton
    Interesting - so essentially I think you're saying if you were me you'd invest in the passive global fund and not split it between funds either. Thanks for your time. I've got some thinking to do.
    Originally posted by davidmt83
    No, the active global fund has a significantly higher % invested in small companies, and possibly in EM/Asia Pacific (here the data isnt clear) , both regarded as higher risk/higher return sectors. It also has less in the USA. So I would choose the active global fund.

    Both the active and passive funds are what is called "fund of funds" that invest in a range of other more specialised funds.

    Another plus for the active fund - its split between the different industries appears to be more balanced. The active fund is 16% finance (banks etc) whereas the passive one is 23%.
    Last edited by Linton; 09-06-2017 at 2:00 PM.
    • davidmt83
    • By davidmt83 11th Aug 17, 12:55 PM
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    davidmt83
    @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
    • bigadaj
    • By bigadaj 12th Aug 17, 6:02 PM
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    bigadaj
    The second fund is very uk focused and less equit based from what I can oust look very attractive to me but it's an individual choice.
    • davidmt83
    • By davidmt83 12th Aug 17, 6:31 PM
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    davidmt83
    The second fund is very uk focused and less equit based from what I can oust look very attractive to me but it's an individual choice.
    Originally posted by bigadaj
    Cheers bigadaj.

    Does any specific fund jump out at you below?

    http://webfund6.financialexpress.net/clients/zurichcp/portfoliopricetable.aspx?schemeID=240413
    • bigadaj
    • By bigadaj 12th Aug 17, 7:37 PM
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    bigadaj
    Originally posted by davidmt83
    One of the global equity options if you want to keep things simple, though presumably you can mix and match.

    Probably best to educate yourself a bit to be able to make your own decisions, have a read on the monevator website.
    • Linton
    • By Linton 12th Aug 17, 11:03 PM
    • 8,188 Posts
    • 8,046 Thanks
    Linton
    @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
    Originally posted by davidmt83
    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.
    • davidmt83
    • By davidmt83 12th Aug 17, 11:48 PM
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    davidmt83
    Appreciate your time and effort Linton, thank you
    Last edited by davidmt83; 12-08-2017 at 11:50 PM.
    • davidmt83
    • By davidmt83 13th Aug 17, 7:18 PM
    • 2,286 Posts
    • 1,007 Thanks
    davidmt83
    Linton - just one final idea, what might you think to splitting the investment 50/50 between a Global Equity Index Tracker Fund and a Global Equity Active Fund?

    There appears to be two Index-Tracker / Passive funds:

    Global Equity Index Tracker: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_MJNI.pdf
    Global Equity Passive: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_NFTZ.pdf

    and one Actively managed fund:

    Global Equity Active Fund: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_NFTW.pdf

    Would this be a sensible move? If so which Index-Tracker / Passive fund might be a preferred choice?
    Last edited by davidmt83; 13-08-2017 at 7:27 PM.
    • davidmt83
    • By davidmt83 17th Aug 17, 11:52 PM
    • 2,286 Posts
    • 1,007 Thanks
    davidmt83
    what might you think to splitting the investment 50/50 between a Global Equity Index Tracker Fund and a Global Equity Active Fund?

    There appears to be two Index-Tracker / Passive funds:

    Global Equity Index Tracker: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_MJNI.pdf
    Global Equity Passive: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_NFTZ.pdf

    and one Actively managed fund:

    Global Equity Active Fund: http://factsheets.financialexpress.net/ZCPBF/ATLAS3_NFTW.pdf

    Would this be a sensible move? If so which Index-Tracker / Passive fund might be a preferred choice?
    Originally posted by davidmt83
    Anyone? Does this sound a sensible idea? Am I overcomplicating things and maybe I should just stick with 100% Global Active? Biggest potential gains over passive / Index-tracker?
    Last edited by davidmt83; 17-08-2017 at 11:58 PM.
    • Malthusian
    • By Malthusian 18th Aug 17, 11:17 AM
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    Malthusian
    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.
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