SIPP, Hargreaves Lansdown and Funds

Si1

jamesd wrote: »

Si1, right, the first thing you do is completely ignore any fund or fund manager (as distinct form management company) that has a record of not achieving at least average performance. That eliminates all of the trackers and other funds with a record of poor performance.

Then you apply the zero sum rule that those who favour efficient markets use: if those are consistently doing badly, the money they aren't making has to be going to the rest.

Your challenge then is to find the managers whose style matches anticipated market conditions and who may actually deliver. You still might not succeed but you at least have the advantage of selecting from those that aren't sure to do badly.

For the UK markets there was a study a few years ago that found that simply selecting the best managers from the previous period couldn't produce outperformance only because of the initial commission that was charged on fund switches. Since times have moved on and nobody needs to pay initial commission these days that study now shows that you can get outperformance.

broadly agree - except it's already reasonably well established that trackers DO outperform the average if only based on their low charging structure

but I would agree that if applied succesfully then the above argument gives you the best chance of getting an outperforming active fund

I'm going to sign off now - am truly grateful for this enlighteniong dicsussion - all the best

LongTermLurker

I'll give you a thanks for that Actually, I do have a tracker fund as part of my pension, purely on the low charge basis. It does quite well and means I keep at least one finger on the pulse at any one time.

bosa

I am considering transferring two personal pension plans into a SIPP. One has no exit fee the other a nominal amount.

The combined cash total is about £140k. I'm 41 and don't plan on making any further contributions for the foreseeable future.

If an annuity won't be taken for at least 25 years would it still be prudent to buy into funds in stages ?

Over what kind of time frame should I be drip feeding the transferred cash into selected funds to benefit from pound cost averaging ?

purch

If an annuity won't be taken for at least 25 years would it still be prudent to buy into funds in stages ?

No.

Are you sure you fully understand what you are doing ?

bosa

Like most people, pension planning is something I would like to get right, hence asking for advice in this forum.

purch

What is the reasoning behind moving Funds from two Personal Pensions into a Self Invested Personal Pension ?

bosa

If I said that one of the funds was an original Guardian Royal Exchange Choices Managed pension would that go some way to answering your question !

dunstonh

bosa wrote: »

If I said that one of the funds was an original Guardian Royal Exchange Choices Managed pension would that go some way to answering your question !

no. What are your reasons for moving into the most expensive option for funds?

bosa

dunstonh wrote: »

no. What are your reasons for moving into the most expensive option for funds?

From 14 years of monthly contributions to the Choices fund from 1995 contributions £57k.

From 14 years of monthly contributions to the Choices fund from 1995 voluntary fund value £58k.

Effect of inflation would obviously wipe out this £1k "gain".

Charges AMC 1%, monthly additional charge £2.94 and a bid offer spread of 5%.

Would I not be better off in an All share tracker with a Total Expense Ratio of 0.27% if the pot has another 25 years to grow ?

dunstonh

Would I not be better off in an All share tracker with a Total Expense Ratio of 0.27% if the pot has another 25 years to grow ?

Dont know. You havent told us how you are currently invested and what other options exist and what the costs of transfer will be?

One thing that is obvious though, putting 100% into any one single focused fund is bad investing. 100% into a FTSE all share tracker is not a good idea. It doesnt matter if its cheap. You are putting all your eggs in one basket and the UK stockmarket is not known for its diversification and investment returns.