How is my pension doing / should I change it?

[Deleted User]

Hi,

I've received my pension investment statement today and it shows since 01/07/08 the value of the fund has gone from £1216.66 to £1055.06.

I can appreciate the current markets and the downturn etc. so should I be relatively content with this performance?

Also I've chosen to invest 100% into Active Global Equity fund. Would it be a good idea to split this to say 75% Active and 25% Passive Global Equity funds?

Active Global Equity Fund:
Schroder 30%
Baillie Gifford 30%
Barclays Global Investors - US 13.3%
Barclays Global Investors - European 9.3%
Barclays Global Investors - Japan 6.7%
Lazard 4%
Colonial First State - Global Emergency Markets 2.7%
JP Morgan - Asia Pacific ex Japan 2%
Lloyd George - Asia Pacific ex Japan 2%

Outperformance target: 1.73% (before fees) over rolling 3-year periods

Passive Global Equity Manager
Legal & General

Outperformance target: To track the benchmark return within a reasonable tolerance.

dunstonh

so should I be relatively content with this performance?

Yes. Its gone down less than the drop in the FTSE.

I've chosen to invest 100% into Active Global Equity fund.

Which is medium/high risk and has potential of 50% drop in 12 months. The fund does give diversification with the asset percentages handled by the manager. A good option if you dont know what youare doing.

[Deleted User]

dunstonh wrote: »

Yes. Its gone down less than the drop in the FTSE.

Would you suggest then that given this it's worth keeping my choice of funds as 100% invested in this and not something like a split of 75% Active and 25% Passive Global Equity funds?

If you need any more info on either please say and I'll have a look in the documentation I've got.

bendix

It would depend on your personal circumstances such as age, but based on the fact that the pot is so small and that your user ID includes the numbers 83 I'm guessing your are in your twenties and just starting out in life.

You have lost around 19% in that time. It sounds a lot, but the actual is a piffling £160 which is absolutely nothing to worry about if my assumptions about your age are correct. You have literally decades to recoup the loss and yuo should be thinking yourself lucky that you're not in your 50s and have lost, for example, 19% of £150,000. Now THAT would make a serious dent in your retirement plans.

I dont know what you're worrying about. For a 20-something to have a pension plan at all means you are way ahead of your peers, and that you're thinking about it at all is a good sign. If I were you, I wouldnt change a thing except keep plugging away and even increasing your contributions. If you wanted to mitigate some risk, put extra contributions into a more balanced fund focused on a mix of shares, bonds, property and cash.

[Deleted User]

bendix wrote: »

your user ID includes the numbers 83 I'm guessing your are in your twenties and just starting out in life.

Your assertions are correct, I'm 25 and started my pension when I was 23.

Although the ammount on the statement is pretty small I'm also in the process of transferring across (and hence reconsidering my options) a previous pension of £2400.

bendix wrote: »

even increasing your contributions

I already have. The most I'm allowed to put in, and do, is 6% matched by another 5%.

I was just really looking for other people's views if only to learn and add to my knowledge of pensions before I'm nearing my pension age and everything does become a little more serious.

bendix

I'm not sure you're right when you say you can only contribute 6%. As far as I'm aware, you're allowed to put 100% of your gross salary into a pension scheme, providing it doesnt exceed £235,000 per annum.

Where did you get that 6% figure from. I suspect you're confusing maximum contribution with your employer's expectation that if put in as much as 6% then they contribute 5%. It's not a ceiling on YOUR contribution.

A good rule of thumb oft-mentioned on here is to halve your age and make sure you care contributing that as a percentage of your salary. You seem to in line with that near enough.

[Deleted User]

bendix wrote: »

I'm not sure you're right when you say you can only contribute 6%.

The Scheme gives you the flexibility to choose how much you want to put aside ('or sacrifice')" into your Pension Fund as a regular contribution. This can be between 1% and 6% of your Reference Salary.

- From the booklet.

I do have the option of AVCs if I wanted to contribute more than 6%.

bendix wrote: »

A good rule of thumb oft-mentioned on here is to halve your age and make sure you care contributing that as a percentage of your salary. You seem to in line with that near enough.

Yeah I've read that before so I'm not massively far off from that figure.

So far then we've had two people for 100% Active Global Equity Fund and none for a split of say 75% Active and 25% Passive Global Equity funds... Any more takers?

dunstonh

Normally, 100% investing in one fund is a bad option. However, that fund appears to be a fund of funds. In other words it invests into other funds for you with the asset allocation handled by the fund manager. So, you are getting diversifcation already.

passive funds tend to give market average performance as they are run by computer. Often they just track the index or benchmark they are looking for .

JayZed

david, I wish that:
(a) my pension fund had only lost 13% over the past six months
(b) I'd started paying into my pension when I was 23

Seriously, you've been very sensible to start your pension so young, and at your age I wouldn't worry about having your pension investments in higher-risk funds. You've got a few years to go before retirement!

[Deleted User]

Thanks guys, all sensible advice as always and really confirming everything I've read and learnt about pensions, investments et al. I'm no IFA myself but I like to think the decisions I make are informed and the best at the time of making them.