Virgin money

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jamesd wrote: »

You've used a version of the HSBC fund with a 1% annual charge and 5% or so in money market instead of index investments and compared it to a Virgin version with 1% charges and 100% invested..

Oh yeah.:o

Is there another HSBC one that invests 100% in equities that we can see on that site that gives the correct data to compare?

I suppose that goes to show how easy it is to get things wrong with the complicated Pension market and all the various policies available.
As jem16 says, Virgin don't offer such complicated range of products

Edit:

Actually, I guess you got that breakdown from this page:
http://www.trustnet.com/Factsheets/Factsheet.aspx?univ=P&fundCode=MISFAP&pagetype=portfoliobreakdown

If so, this comparative page for the Virgin product is most interesting
http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=V7PG&univ=U&pagetype=portfoliobreakdown

(it suggests 20% in the money market ... and a whole load elsewhere, less than 30% in UK equities)

At the end of the day (or my life) I don't care where the money is invested, just what is going to give me the biggest bang for my buck.

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jamesd wrote: »

...
For lower fund cost (but a platform charge at HL to add) the HSBC FTSE All Share index institutional units did 12.44% over one year, 32.61% over three and 30.21% over five.

Oh I see you later added this, Thank you

That one appears to have only 92.35% invested in UK equities
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-all-share-index-inst-accumulation/fund-analysis

When I look at the Virgin UK index tracker fund, I see these figures:

1 year - 12.09%
3 years - 30.61%
5 years - 29.36%


The other site says 12.3% for 1 year.

You see how difficult I find it to accurately compare?

To put things into context, I would probably have been lucky to get 1% growth in the past 12 months if I were still with Scottish Mutual (now also run by Phoenix Life) - I can't say for certain as I can't even see the fund prices on the site.

jamesd

I didn't see one of the others listed at Trustnet, it's why I used one at HL instead.

The HSBC fund breakdown is accurate supplied by the fund manager. The Virgin one is "estimated from the fund's sector average" and not what that fund really holds.

Biggest bang for the buck would be picking a good active fund. But that's not as easy as it might seem. Alternatively if you want more bank for a buck with a passive tracker you could try something like a 2 times leveraged FTSE tracker ETF like LUK2. But doubly leveraged means twice the volatility down, not just up, and that won't be liked by most people. It's what I use for my passive UK tracking at the moment and for some time now. LUK2 is definitely not a wise choice for a newcomer to investing, nor, because of dealing costs, without at least a few thousand to invest.

Sure, it can be difficult to compare. It's a competitive market with lots of retailers and lots of products. Easier than say trying to comprehensively compare cars and ongoing running costs for them when buying the vehicle and fuel from lots of different possible places. Part of the pain sometimes with investments is that there really is a lot of data available compared to other choices. That can make it hard to pick. Sometimes "good enough" is sufficient.

dunstonh

You may not consider it was a great decision, but hindsight is a wonderful thing isn't it, and sadly no one can be sure what the future will bring.

It wasnt to do with hindsight. Looking at point of sale we know its expensive. We also know it has poor investment options that are actually unsuitable for the majority of the population.

Of course, I could have spent more good money asking an IFA to suggest more good options ..

An IFA would have been cheaper than what you have got.

but they can only tell you what has happened in the past, and as Virgin explain, whilst managed funds often can produce great returns in the relative short term (1 year, 5 years, even possibly 10 years) they rarely if ever outperform the stockmarket over the longer term a pension is deigned for.

We are not talking about performance as that is always an unknown. I was talking about the factual things we do know. Poor investment choice and charges are facts. However, if you want to look at fund performance then we do know that you are getting below average performance consistently. That is what Virgin will deliver.

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dunstonh wrote: »

An IFA would have been cheaper than what you have got..

How do you get cheaper than free? :huh:

If an IFA could provide a lower cost product, why didn't he???
The charges I aws paying was higher than 1% ... but I was told that fund managers don't come cheap and I wouldn't beat the market without a fund manager.

It was Virgin that showed me the light, stating that fund managers rarely beat the market in the long term, especially so after their fees are taken into consideration

dunstonh wrote: »

We are not talking about performance .... That is what Virgin will deliver

I am!

And that is exactly what Virgin have delivered for me
(especially when compared to the diabolical performance the product the IFA advised me to take out)

Paulie29

Cheers for advise guys.
Can anyone recommend a good pension provider then ?

Could I get advise from a high street bank maybe ? And would there be a charge for that ?

Cheers

dunstonh

How do you get cheaper than free?

Its not free. The cost of retail is in the annual management charge. You are paying 1% pa. You could have been paying around 0.4-0.5% via an IFA (0.2% plus cost of advice bringing reduction in yield to around 0.5%).

If an IFA could provide a lower cost product, why didn't he???

Did you go back to him when you bought the Virgin to ask him first? 1990s pensions were generally poor quality all round (by modern standards). The early 2000s so a move to better quality and lower costs.

it was Virgin that showed me the light, stating that fund managers rarely beat the market in the long term, especially so after their fees are taken into consideration

And the virgin fund WILL NOT beat the market after their fees (which are higher as well). However, whether it is managed or tracker really didnt need to be an issue as managed funds in pensions can be quite cheap compared to their unit trust equivalents. 100% UK equity is just bad investing. Doesnt matter if its tracker or managed.

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jamesd wrote: »

I didn't see one of the others listed at Trustnet, it's why I used one at HL instead.

The HSBC fund breakdown is accurate supplied by the fund manager. The Virgin one is "estimated from the fund's sector average" and not what that fund really holds.

Biggest bang for the buck would be picking a good active fund. But that's not as easy as it might seem. Alternatively if you want more bank for a buck with a passive tracker you could try something like a 2 times leveraged FTSE tracker ETF like LUK2. But doubly leveraged means twice the volatility down, not just up, and that won't be liked by most people. It's what I use for my passive UK tracking at the moment and for some time now. LUK2 is definitely not a wise choice for a newcomer to investing, nor, because of dealing costs, without at least a few thousand to invest.

Sure, it can be difficult to compare. It's a competitive market with lots of retailers and lots of products. Easier than say trying to comprehensively compare cars and ongoing running costs for them when buying the vehicle and fuel from lots of different possible places. Part of the pain sometimes with investments is that there really is a lot of data available compared to other choices. That can make it hard to pick. Sometimes "good enough" is sufficient.

Essentially all the funds attempt to track the performance of the FTSE all share UK index.

How they achieve that is presumably up to them (within whatever restrictions the rules of a particular product allow)

I think the different products available from the same provider that on the face of it all do the same thing illustrates just how easy it is to pick the wrong one.

With Virgin, the choice is easy. That is "good enough" for me

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dunstonh wrote: »

Its not free. The cost of retail is in the annual management charge. You are paying 1% pa. You could have been paying around 0.4-0.5% via an IFA (0.2% plus cost of advice bringing reduction in yield to around 0.5%)..

What are you on about??? :huh:

I paid £100s for advice from the IFA.
He advised a fund that cost me a lot of money, not just the higher than 1% annual charge, but also a product that then performed diabolically

I paid nothing to decide upon Virgin.
Virgin were very clear about the 1% annual charge (and I think a negligible tiny extra charge for something ... but it was so small it wasn't worth worrying about)

dunstonh wrote: »

And the virgin fund WILL NOT beat the market after their fees

I know it won't BEAT the market ... but I also don't expect it to fall significantly below either
That's what a tracker is intended for.

dunstonh

I paid £100s for advice from the IFA.
He advised a fund that cost me a lot of money, not just the higher than 1% annual charge, but also a product that then performed diabolically

You are paying £100s for no advice with Virgin. You cannot compare 90s products with later versions.

I paid nothing to decide upon Virgin.
Virgin were very clear about the 1% annual charge (and I think a negligible tiny extra charge for something ... but it was so small it wasn't worth worrying about)

Yes you did. You are paying around 2-3 times more annually than an IFA could have done.