Balancing a retirement portfolio that has a with-profits fund element

dxt_2

I have had with-profits funds for many years (Prudential Pru bond and Standard Life wipro in a pension pot) although I ceased adding to them more than a decade ago and have since applied new investment moneys to OEICs in my ISA, or into cash savings.

I now want to try to better monitor and balance my overall portfolio, looking to retirement in about 5 years time. For the ISA components it is no problem because Morningstar or other tools allow me to x-ray the funds and see the overall balance of different investment types, with the aim of matching to my investment horizon and risk appetite.

The problem is that no tools that I can find allow me to add the with-profits funds to the analysis. I do not know, and can find nowhere to say, how to class them as equity, bond, blend or whatever, much less to allocate a geographic or risk factor. The normal tools seem never include with-profits funds in this way. Since these funds provide a fair proportion of my investments, an analysis that ingnores them gives an unbalanced view of the portfolio.

I do not want to sell them, so any help that someone could offer as to how to treat or simulate them in a portfolio analysis would be gratefully received.

dunstonh

I do not know, and can find nowhere to say, how to class them as equity, bond, blend or whatever, much less to allocate a geographic or risk factor.

They are effectively portfolio funds in their own right and will have a spread of assets and shouldnt be placed in an equity region or bond sector.

an analysis that ingnores them gives an unbalanced view of the portfolio.

Not really. As you know they are a portfolio fund you can ringfence them from your OEICs/UTs.

dxt_2

Thank you

And I realise I phrased my original post badly. It is not the WP that I need to describe as equities/bonds etc, but the non-WP investments that I need to balance taking account of the WP element.

Perhaps you can comment further.

dunstonh wrote: »

As you know they are a portfolio fund you can ringfence them from your OEICs/UTs.

My question: if I ring-fence them, how can I get a clear view of total investment profile?

For example if I had constructed a portfolio excluding the WPs to reflect a desired Very Conservative profile, and say I had twce as much WP value as total value in the Very Conservative profile portfolio, then my overall profile would be shifter toward Moderate by the WP investments.

Or - purely theoretically - if I was a High Risk investor, and my OEICs etc were so invested, my overall profile would be skewed toward Moderate by the WP.

Given the deisre to remain with the WP, the way I can make changes to my risk profile is to make changes to the non-WP element of total investments, allocating different funds, bonds and cash amounts as desired. But I cannot see a way of doing this if the WP are ring-fenced and not included in a description of total assets. I rather need to include them in the same portfolio as everything else, and it seems to me that if as a portfolio investment they are a black box the contents of which I need not concern myself about - (which is fine) - then I need to somehow simulate them in the total asset balancing so that the risk profile I end up with outside them is correctly reflecting their presence.

Does that make sense?

Linton

If I had to classify WP funds as something else to fit in with some model I would regard them perhaps as investment grade (relatively safe) corporate bonds in as much as they do not drop in value. Perhaps something like 75% bonds 25% FTSE100-type equity might be appropriate.

dunstonh

I would still ringfence the WP fund away but make the risk of the "other" portfolio higher to compensate for any difference in risk you have. How much would depend on the risk profile of the with profits fund (they are not all equal in risk). I wouldnt try to match OEIC/UTs to the WP fund holdings but try and level the risk of the other portfolio (which usually means greater equity content)