Pension Fund selection

Saving_Sarah

Hi - I'm a regular on MSE but brand new to the forum. Thanks in advance for reading !

I'm 35 and am in my employer's group pension scheme and am learning about pension funds as I want to diversify the pot into a number of funds - its currently going into one UK equity fund. I've got details of the available funds.

Found a site called Trustnet , but despite googling I don't know about it's reputation? Can anyone recommend other fund performance site?

Also, Trustnet's (independent?) performance sheets refers to different units within a fund but I've no idea. Will my work scheme confirm which unit I've purchased?

Would an IFA be willing to advise on fund selection, given that its a fixed list with a group scheme (presumably the IFA wouldn't make commission by giving me advice). Or wouldn't they think it worth their while advising me? I'm worried they won't be interested in my small question.

Thanks! Fund performance is new stuff for me...

dunstonh

its currently going into one UK equity fund.

Well done for looking at it as 100% into a single sector fund is bad investing.

Found a site called Trustnet , but despite googling I don't know about it's reputation? Can anyone recommend other fund performance site?

Trustnet is the cut down free version of FE Analytics effectively. Financial Express as one of the biggest players in fund data and very reliable.

Also, Trustnet's (independent?) performance sheets refers to different units within a fund but I've no idea. Will my work scheme confirm which unit I've purchased?

I havent looked at trustnet for a while as I used the paid version but I didnt think it listed pension funds on the free version. It may do now but it never used to.

Would an IFA be willing to advise on fund selection, given that its a fixed list with a group scheme (presumably the IFA wouldn't make commission by giving me advice). Or wouldn't they think it worth their while advising me?

An IFA can advise you if you want but it probably isnt worth it unless you already have an IFA or a family IFA.

Until the value of the pension gets in excess of £10k, it really doesnt matter that much in the scheme of things which fund you go in if you are paying in monthly. The differences in returns in those early years make very little impact. Once you get above a certain amount then it does start to have an impact. However, if you pick a selection of single sector funds then you need to have a strategy and rebalance the portfolio periodically. If you are not likely to do that then you should use a portfolio fund (one that automatically invests in a spread of areas)

gadgetmind

Saving_Sarah wrote: »

I want to diversify the pot into a number of funds - its currently going into one UK equity fund. I've got details of the available funds.

A great idea.

Found a site called Trustnet , but despite googling I don't know about it's reputation? Can anyone recommend other fund performance site?

Trustnet is good, so is Morningstar and even the Hargreaves Lansdown web site.

Also, Trustnet's (independent?) performance sheets refers to different units within a fund but I've no idea. Will my work scheme confirm which unit I've purchased?

It can be hard find out but the scheme should be able to tell you.

BTW, regards performance, what you're currently doing is called "asset allocation". This isn't something you should take lightly. Looking at what's done well recently and buying some of that is, 1) what everyone does when they start out, 2) totally wrong.

Reading some of the books mentioned here could be a good start.

https://forums.moneysavingexpert.com/discussion/3973853

If your scheme does have a good portfolio fund (global equity coverage, plus some bonds and property, etc.) then this is usually the best option unless you do feel you have the knowledge required to put something together yourself.

Saving_Sarah

Thank you both - this is great and I appreciate the help.

I called the scheme today and I've got details of the specific units so I should be able to look up all of the available funds and view their performance.

I appreciate what you are saying about taking this seriously - understanding the funds that are being invested in and not

judging on recent performance. What do you define as recent ? Is looking at performance over 5 years helpful, or 10 a

better indicator? How often should you review your portfolio - once a year? I guess I need to do some reading....thank you for the recommendations.


I'll focus on spreading the investment across equity, bonds, property and geography, but I wasn't aware of "portfolio funds" which do the work for you - the scheme help material refers to lifestyle selections which seems to be something different (i.e. selections based on investment style and proximity to retirement), but I can't see anything obviously labelled a portfolio fund. I'll ask them some more questions.

Once again, thank you.

dunstonh

I'll focus on spreading the investment across equity, bonds, property and geography, but I wasn't aware of "portfolio funds" which do the work for you - the scheme help material refers to lifestyle selections which seems to be something different (i.e. selections based on investment style and proximity to retirement), but I can't see anything obviously labelled a portfolio fund. I'll ask them some more questions.

Look for funds that call themselves balanced managed (or similar to indicate risk) or have mixed in the name. Basically funds that do not indicate where they invest. i.e. UK Equity fund tells you that it invests in UK Equity. Same with Asia, US, Europe etc. Portfolio funds are a mixture of areas so the name wont be area/sector specific.

Saving_Sarah

when i asked the question , unfortunately the scheme advised me that portfolio funds are "not available on this particular product"....

I'll keep doing my research...

Thank you!

dunstonh

when i asked the question , unfortunately the scheme advised me that portfolio funds are "not available on this particular product"....

I dont think I have ever seen a pension not offer at least one portfolio fund. Who is the provider of the group scheme? Are there no funds with names that do not reflect a certain region?

Saving_Sarah

It's L&G workplace. I may have missed it so I'll have another look at the details over the weekend. Thank you!

celiacelia226

Increase in the elderly, newborn babies to reduce the dependency problem of the elderly has become a social concern.Hope to get good care, to healthy aging.

fizio

agree - you want to decide the mix you want in terms of the main funds
- gilts
- corp bonds
- uk/ftse
- developed world
- emerging markets
- other specialist

obviously you decide a mix to match your age and risk profile.

Saving_Sarah

I've spent a lot of time this weekend on the web learning about asset allocation and reading the forums.

DunstonH - I looked again at the available funds in more detail and many look to be 'balanced' in that they are investing across a range of assets, geographies and sectors...thanks v much.

The list of funds I can choose from is on the L&G website, Funds zone area - GPP 2000 . (I can't post urls as a newbie).

To be honest I'm still feeling overwhelmed by the decisions and so have come back for more advice:

Some funds are externally managed and have an additional fee - similar 'balanced' funds look to be available through the in-house managed funds from L&G. I'm guessing one might select an external fund over the "in house" fund because of its performance?

How often do you review your fund allocations?

I've looked at some free asset allocation models and I'd like to go for moderate to high risk funds. I'm considering keeping 70% in equity and 30% in property, bonds, gilts etc. 50% in the UK, 20% dev. europe, 15 % n america, 10% asia and emerging markets and I'm trying to choose the funds to match this criteria.

Does this choice sound reasonable - what risk level would you say this is?

I'm trying to use Trustnet to match the various funds to this allocation.

I'm close to approaching an IFA, but to be honest finding the right IFA also looks like a minefield...! Once again, many thanks.