Pension Fund Question

GuruAnt

Hi,



I started a new job recently, and have been offered the company pension.



On the application form, I am offered the choice of splitting the
investment between 3 specified funds, or investing everything in the
default fund.



The funds I can split between are:

• Threadneedle Balanced Pathway 4
  
• Threadneedle Adventurous Pathway 4
  
• Legal and General over 15y Gilts Index
  
• Legal and General over 5y Index Linked Gilts Index
  
• Legal and General Cash
  
• Newton Absolute Intrepid Fund Exempt 2
  

The "default" fund is Legal and General Consensus Index Fund.



I have a vague idea what a pension fund is, but that's about it
Can anyone tell me which would be best? Or direct me towards
somewhere I can compare them? I've tried Google and found some fund
comparison sites, but I have no idea what to look for, never mind
working out if I'm looking at the right thing!



The contribution would be 4% of my salary, plus 8% from my employer -
around £2500 a year. I am 26 years old, married, and have just bought
a house (with a lot of help from an IFA - money's not my
strong-point!).



Thanks!

EdInvestor

What ridiculous names :rolleyes:

It there any info about what the "Balanced Adventurous and Intrepid" funds are actually invested in?

The default fund is an index tracker.The other L&G funds are for people near retirement, no use to you.

jamesd

With very limited data it seems that this is the rough order of risk, low to high:

Newton Absolute Intrepid Fund Exempt 2
Legal and General Consensus Index Fund
Threadneedle Balanced Pathway 4
Threadneedle Adventurous Pathway 4

Newton Absolute seems to be trying to match balanced managed performance with reduced risk of falling. It used to be global, didn't see any data on where it's investing now.

Balanced Pathway Fund
The objective of the Balanced Pathway Fund is to outperform by 1.5% per annum on a rolling 3 year basis a composite index benchmark consisting of: 37.5% FTSE All Share, 13.1% FTSE World Europe (ex UK), 13.1% S8 Composite, 3.8% MSCI AC Asia Pacific (ex Japan), 6.4% Topix, 1.1% IFCI Latin America index, 2% IPD Property, 15% FT British Government All Stocks and 8% JPM Global Government Bond (ex UK).

Adventurous Pathway Fund
The objective of the Adventurous Pathway Fund is to outperform by 1.5% per annum on a rolling 3 year basis a composite equity index benchmark consisting of: 50% FTSE All Share, 17.5% FTSE World Europe (ex UK), 17.5% S8 Composite, 5% MSCI AC Asia Pacific (ex Japan), 8.5% Topix and 1.5% IFCI Latin America index.

Assuming you don't mind ups and downs, I suggest one of the Threadneedle funds, Adventurous is generic "best" for your age if you can stand them. Too new to know how they will do but they look reasonable. If the emerging markets fall dramatically, expect this to do the same until they recover. Periodic drops of 50% or perhaps more for several years wouldn't be surprising if you held them until retirement.

Check them carefully over time because they are new and they could turn out to be terrible.

It's not an impressive list of choices but it is worth having the immediate 200% growth from your employer.