New to Personal Pension

JJforever

Out of curiosity are multi-asset funds the same as 'managed' funds? Are 'managed funds' on the same risk level as global tracker funds? There seems to be so many different names used for similar funds so I'm a little confused.

berbatov10

Thanks Jaguar skills I hoe the answers we get will help everyone in a similar position

berbatov10

Just been onto Cavendish funds site and it gives charges for the fund which in brackets are different if held in a pension, I guss it must be possible? Would it be better as an ISA holding though??

Linton

JJforever wrote: »

Out of curiosity are multi-asset funds the same as 'managed' funds? Are 'managed funds' on the same risk level as global tracker funds? There seems to be so many different names used for similar funds so I'm a little confused.

Managed funds are funds whose investments are decided by a manager. Tracker funds are those whose assets are decided by an index such as the FTSE100. A managed fund may be more or less risky than a global tracker depending on the objective of the manager.

Multi asset funds are any funds that hold a variety of assets - eg shares/share geographies/bonds/property as separate compartments. So they give you a diversified portfolio in one single fund.

dunstonh

Out of curiosity are multi-asset funds the same as 'managed' funds?

No. you can get passive and managed multi-asset funds. Multi-asset means they invest in a spread of assets within the fund (so you dont have to). e.g UK equity, US equity, Japan Equity, Property, UK bonds, global bonds etc.

Are 'managed funds' on the same risk level as global tracker funds?

A managed fund investing in global equities could be on the same risk level but a managed fund investing in other assets could be lower or high risk depending on the assets it invests in.

jem16

berbatov10 wrote: »

Just been onto Cavendish funds site and it gives charges for the fund which in brackets are different if held in a pension, I guss it must be possible?

If you're using the Cavendish SIPP then yes it will be possible as that uses Fidelity Funds Network as its platform. Cost of that was posted in the OP.

PPs or stakeholders through Cavendish will have the choice of funds limited by the pension provider - ie Aviva etc.

Would it be better as an ISA holding though??

Performance wise it will make no difference. Only difference is the tax wrapper - ie pension or ISA.

How do you mean better?

AlanP_2

Jaguar_Skills wrote: »

Berbatov, as I understand it a lot of the personal pension plans restrict you with what you want to invest in. I.e Vanguard under Cavendish PP you cannot invest in the Life strategy series. Hijack all you want, it is always good to get anwers.

I've got a PP with Fidelity via Cavendish and you CAN invest in the Vanguard Life Strategy Funds as shown here when selecting Vanguard from the providers drop down list:

http://www.cavendishonline.co.uk/investments/fund-research/

I think some confusion exists around PPs as there seems to be two types in my mind:

1. Self Select Funds & DIY Manage as offered via Cavendish (above)
2. A more traditional PP offered by insuarnce companies such as AVIVA.

In my, probably simplistic view, the first option is similar to a basic SIPP in as much as some of the more "advanced" investment options are not available hence its lower charges.

JJforever

dunstonh wrote: »

No. you can get passive and managed multi-asset funds. Multi-asset means they invest in a spread of assets within the fund (so you dont have to). e.g UK equity, US equity, Japan Equity, Property, UK bonds, global bonds etc.

Dunstonh

Thank you for the reply but I thought managed funds also invest in a spread of assets?

bowlhead99

JJforever wrote: »

Dunstonh

Thank you for the reply but I thought managed funds also invest in a spread of assets?

Managed funds will not necessarily invest in a spread of types of assets. They will spread the risk between different investments, because that is what a collective investment scheme is all about. But they won't necessarily spread it between different types of assets.

For example, a 'managed fund' might employ a fund manager to select the best damn shares he can in the UK equity income sector. All the assets are shares, and they are all the type of shares that pay good dividends, and they are all from one country. He could be a great manager but it is a specialist fund and not a multi asset fund. He is not holding Colombian real estate or Japanese corporate bonds. He is just holding UK shares. If the value falls out of the UK share market the fund will be exposed.

Similarly, a 'passive fund' might invest against a computer readout of the weighting of the UK FTSE100 index. There is no real active management and no decisions. But again it is only investing in shares, and only the shares of large companies listed in the UK and featuring in that index. It is not investing in US Treasury bills or barrels of oil. It is a specialist fund and not a multi asset fund and if the value falls out of the UK share market the fund will be exposed.

So, active vs passive is not the same as multi asset or not. You can have a balanced managed fund which holds a range of shares and bonds, or you can have a passive fund which has a range of shares and bonds (using indexes rather than having a guy picking them out). Multi asset means you are exposed to different asset classes, the most common ones being shares and bonds and others being real estate, commodities and various alternative strategies.

As different asset classes experience value changes at different times and perform differently across economic cycles, if you are trying to keep your portfolio manageable you should probably have a fund that holds more than one class of asset. Otherwise of course you could just buy lots of different specialist funds that stuck to one type of asset each, like just shares or just bonds.

JJforever

bowlhead99 wrote: »

So, active vs passive is not the same as multi asset or not. You can have a balanced managed fund which holds a range of shares and bonds, or you can have a passive fund which has a range of shares and bonds (using indexes rather than having a guy picking them out). Multi asset means you are exposed to different asset classes, the most common ones being shares and bonds and others being real estate, commodities and various alternative strategies.
.

Bowlhead,

Thank you for that reply. I have obviously got confused as to what a managed fund is.

When you mention 'a passive fund which has a range of shares and bonds (using indexes rather than having a guy picking them out)' - is an example of that type of fund the Blackrock Consensus fund?