Anyone know a low risk Standard Life Pension Fund?

tawse57

Hi,

I have an Executive Pension fund with Standard Life with the pension in their Standard Life Managed Pension Fund.

Quite simply, I would like to move this to a low risk fund ASAP simply because I believe the stock market is topping or near a top.

I contacted Standard Life about this but have not got a satisfactory answer from them - apparently they do not have a cash fund, for example like Equitable Life's Money Management fund, where you can park your pension as cash in the short term.

I asked Standard Life, both via telephone and email, for info on their low risk funds but never got a satisfactory answer - I was directed to their website which, frankly, I found confusing and unhelpful.

Sorry to rant.

Basically, I want to try and minimise my losses in any coming stock market correction, or worse, by moving from the Standard Life Managed Pension Fund to a safer fund? Anyone know of one?

Thank you.

Linton

The usual alternative to an equity fund is one that invests in bonds. The least risky type of bonds are those issued by governments which can guarantee returns in as much as anything in this world can be guaranteed. The slight problem with these is that prices are currently high as people have been looking for safety during the past 5 years. So, especially if your prediction is wrong and share prices continue to increase, there is a chance that you could lose some money in the short term. But if that is what you want I suggest you look for a global bond fund.

More sensible in my view is to look for a investment which is split between bonds and equity so if your prediction is wrong the downside is better protected. I notice that SL have funds called "Active Plus" which are something like 70% bonds with the rest in global shares and a bit of property. Whether they are any good I dont know as they have only been around for a short time.

How long do you have before retirement? If its a long time a short term correction is pretty irrelevant except for the fact that it allows you to buy more units for a cheaper price. Your fear shouldnt be a reason to sell. If you are close to retirement you should normally be in safer investments anyway irrespective of any prediction you may happen to make on future share prices.

dunstonh

Quite simply, I would like to move this to a low risk fund ASAP simply because I believe the stock market is topping or near a top.

Which stockmarket are you referring to?
Are you invested in that stockmarket at the moment?

I contacted Standard Life about this but have not got a satisfactory answer from them - apparently they do not have a cash fund, for example like Equitable Life's Money Management fund, where you can park your pension as cash in the short term.

It can depend on the contract. Old legacy plans often have limited choice.

I asked Standard Life, both via telephone and email, for info on their low risk funds but never got a satisfactory answer - I was directed to their website which, frankly, I found confusing and unhelpful.

The problem is that they cannot stray into areas of advice and they have to be very careful not to do so. So, typically they will refer you to either an adviser or their website or send a publication.

Basically, I want to try and minimise my losses in any coming stock market correction, or worse, by moving from the Standard Life Managed Pension Fund to a safer fund? Anyone know of one?

Impossible to answer without knowing what version product you are on and the funds available to you.

jamesd

First decide which stock market or markets you want to avoid. The US is quite high at the moment, most others aren't, so in general if you're worried about a stock market high, avoiding high concentration in the US is the way to go. European or UK or emerging market or Asian or many other funds can be used to do that.

For that sort of thing you might consider combinations involving the Standard Life European Equity Pension Fund, Standard Life Far East Equity Pension Fund, SL Henderson UK Property Pension Fund.

Alternatively you might look at the SL Newton Real Return Pension Fund. The underlying Newton Real Return fund has done wall managing risk during downturns.

There are many others available via SL but I don't know which are available to you. If you look at your online fund tool that should get you to a list of available funds.

bilbo51

May I suggest that you follow the recommendation in your signature?

tawse57

bilbo51 wrote: »

May I suggest that you follow the recommendation in your signature?

What a funny guy. You must be a great hoot at parties and family gatherings. I am laughing so much. Boy, you are just superb. You must be the wittiest person on the planet. I must tell everyone I know to come here and look at your fantastic contribution. Wow - we are so lucky to be here on Earth right now, right this moment, with you.

tawse57

jamesd wrote: »

First decide which stock market or markets you want to avoid. The US is quite high at the moment, most others aren't, so in general if you're worried about a stock market high, avoiding high concentration in the US is the way to go. European or UK or emerging market or Asian or many other funds can be used to do that.

For that sort of thing you might consider combinations involving the Standard Life European Equity Pension Fund, Standard Life Far East Equity Pension Fund, SL Henderson UK Property Pension Fund.

Alternatively you might look at the SL Newton Real Return Pension Fund. The underlying Newton Real Return fund has done wall managing risk during downturns.

There are many others available via SL but I don't know which are available to you. If you look at your online fund tool that should get you to a list of available funds.

Thanks for the info jamesd - much appreciated. I will take a look into them.

tawse57

Linton wrote: »

The usual alternative to an equity fund is one that invests in bonds. The least risky type of bonds are those issued by governments which can guarantee returns in as much as anything in this world can be guaranteed. The slight problem with these is that prices are currently high as people have been looking for safety during the past 5 years. So, especially if your prediction is wrong and share prices continue to increase, there is a chance that you could lose some money in the short term. But if that is what you want I suggest you look for a global bond fund.

More sensible in my view is to look for a investment which is split between bonds and equity so if your prediction is wrong the downside is better protected. I notice that SL have funds called "Active Plus" which are something like 70% bonds with the rest in global shares and a bit of property. Whether they are any good I dont know as they have only been around for a short time.

How long do you have before retirement? If its a long time a short term correction is pretty irrelevant except for the fact that it allows you to buy more units for a cheaper price. Your fear shouldnt be a reason to sell. If you are close to retirement you should normally be in safer investments anyway irrespective of any prediction you may happen to make on future share prices.

Thanks Linton - much appreciated. I am trying to avoid bonds more than shares if truth be told as I think that we are about to see some kind of major bond meltdown, especially with UK gilts. So I am loathe to invest in anything bond related for these reasons and because, as you say, they are very pricey currently.

The likes of PIMCO and Blackrock are apparently now beginning to hedge against falling bond prices due to the possibility of a US rate rise so I think we could be seeing some turmoil later this year both in the bond markets and also, possibly, in the stock markets.

I have 15 years till retirement.

grey_gym_sock

15 years would be a very long time to sit in cash. there have been very few historical periods in which that wouldn't have been an extremely bad call. who knows - you might pick good points to go into cash, and then out again - but it would be a big risk to take.

i think the suggestion to keep your equity exposure well internationalized, with not too much in the USA, is good. as is keeping your bond exposure internationalized; and keeping bond exposure low. and using a bit of property.

all the above is much less of a 1-way bet than switching into cash.

mania112

tawse57 wrote: »

What a funny guy. You must be a great hoot at parties and family gatherings. I am laughing so much. Boy, you are just superb. You must be the wittiest person on the planet. I must tell everyone I know to come here and look at your fantastic contribution. Wow - we are so lucky to be here on Earth right now, right this moment, with you.

If I was at the party I would laugh.

tawse57

grey_gym_sock wrote: »

15 years would be a very long time to sit in cash. there have been very few historical periods in which that wouldn't have been an extremely bad call. who knows - you might pick good points to go into cash, and then out again - but it would be a big risk to take.

i think the suggestion to keep your equity exposure well internationalized, with not too much in the USA, is good. as is keeping your bond exposure internationalized; and keeping bond exposure low. and using a bit of property.

all the above is much less of a 1-way bet than switching into cash.

Thanks for the input grey gym sock.

Sorry, I did not make myself clear. I am not planning on staying in cash for 15 years. Was merely thinking of trying to move somewhere safe from equities for the time being - say 2 to 3 months - to somewhere with lower risk such as a cash fund... and then if there was a sizeable correction of 10% or 20% then moving back into equities.

The Equitable Life has such a cash fund where people can move their funds to from shares for short period to minimise risk, but the Standard Life appears not to have anything similar. They told me on the telephone that their lowest risk was one to do with UK Gilts... but there are an increasing number of financial articles cropping up about a potential implosion of UK government backed bonds.

DOW, FTSE, S&P 500 are all looking very frothy to me at the moment - but perhaps this time it is different? :-)