Managed Funds

Dundonald321

Can anyone give me their best guestimate as to what rates have been achieved by "managed funds" over the past 5 or so years? I have a pension pot of circa £300k and would like to go down the route of investing this and taking say £30k a year as opposed to going down the annuity route

masonic

According to Trustnet, and considering only open ended funds, the best return was from Axa Framlington Biotech, which returned 35% per year and the worst was MFM Junior Gold, which returned -27% per year. Maybe you could be more specific?

Dundonald321

I suspect that I may be looking for the impossible, however I was kind of hoping for an answer at around 8% as an average. As this would allow me to draw around £30k a year, well, just under this and my "pot" would not really reduce by much, if indeed anything?

masonic

Dundonald321 wrote: »

I suspect that I may be looking for the impossible, however I was kind of hoping for an answer at around 8% as an average. As this would allow me to draw around £30k a year, well, just under this and my "pot" would not really reduce by much, if indeed anything?

Presumably you would want this amount to increase with inflation? If so, then the average return for a global equities portfolio based on the last century is about 6.3%. There is some speculation that returns over the next 5-10 years will be lower than that.

How long do you need the money to last? You are considering a 10% withdrawal rate, which leaves you with about a 50% probability of running out of money after 18 years, based on the above returns, and a definite possibility you'll run out of money much sooner.

colsten

How about splitting your money into an annuity and some income trusts?

Dundonald321

Hmm, Unit Trusts, what sort of averages have they been throwing out over the last 5/5 years?

Dundonald321

18 years will be fine as I will be pushing up the daisies long before this. I don't need it to be index linked as I have a company IL pension plus my SP to get by on.

dunstonh

Can anyone give me their best guestimate as to what rates have been achieved by "managed funds" over the past 5 or so years?

Managed fund is an indication that there is a fund manager making a decision. It does not indicate risk or asset type. So, you could have cash funds right through the risk scale to global emerging markets and specialist funds. There are over 45,000 managed funds across the major tax wrappers.

I suspect that I may be looking for the impossible,

Impossible and irrelevant. Getting an average does not achieve anything as cash is very different to corp bonds to UK equity to property etc.

Unit Trusts, what sort of averages have they been throwing out over the last 5/5 years?

Same answer as above. May be better to tell us how you intend to construct your portfolio. Multi-asset or a collection of single sector? What sort of risk profile? what type of investment strategy? What type of drawdown strategy?

bigadaj

Dundonald321 wrote: »

Hmm, Unit Trusts, what sort of averages have they been throwing out over the last 5/5 years?

Get a copy of smarter investing by Tim hale. This gives some good guidance on accumulation and decummulatiilon of invetsments, with some good graphs and plots showing spread of risk and probabilities of emptying your pot with different withdrawal rates.

It's not perfect and very passive biased but will certainly help you understand how you might do what you want and the risks of doing so.