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SIPP Advice Please - how well is mine doing?

Bosun
Bosun Posts: 22 Forumite
Tenth Anniversary Combo Breaker
I currently have a SIPP with a medium sized company where it is invested in a fairly broad range of equities. Over the last three and a quarter years since transferring funds into this SIPP, it has grown by about 22.5% or an average of a fraction under 7%/year after all fees and charges. It is currently lower in value than it was a few months back, but I guess there will always be this volatility.


I recently spoke to a friend who is an advisor for St James Place and by way of comparison I asked him what sort of returns their funds were making. His reply somewhat surprised me, as he replied that over the last four years they had returned an average of over 11% pa after charges! (I'd be interested if anyone can substantiate this!)


So, my question is firstly whether my fund is 'doing OK' and also whether there are any 'league' tables for pension funds that compares performance after charges over say 1, 3 & 5yrs etc. If I can find a provider that consistently seems to outperform others I would be happy to switch and am happy to pay high charges if the fund performs well above average - Any and all comment appreciated!
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Comments

  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    You are after the holy grail!

    Your funds are performing in line with long term average returns in equity so are doing fine. We have been in a long bull run over the last few years so returns have been slightly higher, my last review of trustnet looked at returns of 10-11% for my portfolio over the last three to five years. There is plenty of information on fund performance, but historic performance is no guide to the future as the adverts say.

    St James place have a reputation for mainly making money for St James place, so I'd treat any claims for outperformance with scepticism.
  • dunstonh
    dunstonh Posts: 120,095 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I recently spoke to a friend who is an advisor for St James Place and by way of comparison I asked him what sort of returns their funds were making. His reply somewhat surprised me, as he replied that over the last four years they had returned an average of over 11% pa after charges! (I'd be interested if anyone can substantiate this!)

    1 - not matching the same timescale. It may only be 9 months out but that is an important nine months.
    2 - did the SJP sales rep compare your portfolioi against their investments on a similar volatility risk rating? (if no, then any comparison is meaningless as in that period, the higher risk portfolios would have beaten the lower risk).
    So, my question is firstly whether my fund is 'doing OK' and also whether there are any 'league' tables for pension funds that compares performance after charges over say 1, 3 & 5yrs etc.

    You have not given enough info for us to say. It could be doing well or it could be doing poorly but without knowing the volatility risk of the portfolio and comparing on a like for like basis, nobody can say.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Bosun wrote: »
    His reply somewhat surprised me, as he replied that over the last four years they had returned an average of over 11% pa after charges! (I'd be interested if anyone can substantiate this!)

    I'd be surprised if this was the case. Running the first 12 predominantly equity funds through FE Analytics (not picked, this is just how many funds FE Analytics can put on a single chart), I see a high of 19.81% and a low of -4.24% over the last 4 years. That's total return, not per annum - to get 11% annualised return the total would have to average out at 52% over this timeframe. I wouldn't be too surprised to hear that they had averaged 11% total return over the past four years based on this, but 11% per annum over that time looks highly unlikely.

    It might be interesting to ask for proof of this claim from your friend, as 11% per annum would be an enormous return and it would be genuinely interesting seeing how he would have structured your portfolio to achieve that!
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • philwal_2
    philwal_2 Posts: 56 Forumite
    Was he comparing funds like for like as I am sure that I can pluck funds from the air that have out performed 11% average over the last 3-5 years. St James place are very have high fund charges and expensive advice charges. Were the funds that he mentioned in line with your attitude to risk. Your average of 7% per annum is doing well.
  • My investments have managed 9% per year over 3¼ years to end of Jun-15. But over 4¼ years it's only 6%.

    Timing is everything on short time frames.

    Which makes it a bit of a nonsense really.
  • purch
    purch Posts: 9,865 Forumite
    It's not a competition or a race.

    Your SIPP should be invested in a way that meets your risk profile as aspirations.

    How other people invest and the returns they get are unique to their overall profile, so unless you exactly match their profile not a lot of use to know.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • FatherAbraham
    FatherAbraham Posts: 1,024 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Bosun wrote: »
    I currently have a SIPP with a medium sized company where it is invested in a fairly broad range of equities. Over the last three and a quarter years since transferring funds into this SIPP, it has grown by about 22.5% or an average of a fraction under 7%/year after all fees and charges. It is currently lower in value than it was a few months back, but I guess there will always be this volatility.

    Losses, not "volatility". Volatility is what's said by people who want to play down the risk of losses.
    Bosun wrote: »
    I recently spoke to a friend who is an advisor for St James Place

    Sales advisor, not an independent financial advisor.
    Bosun wrote: »
    and by way of comparison I asked him what sort of returns their funds were making. His reply somewhat surprised me, as he replied that over the last four years they had returned an average of over 11% pa after charges! (I'd be interested if anyone can substantiate this!)

    Showing historical outperformance is easy, with a broad range of funds to cherry-pick from.
    Bosun wrote: »
    So, my question is firstly whether my fund is 'doing OK'

    Probably, as long as you've chosen a sensible range of asset classes, allocated to match your risk profile, and gone for low-cost funds. Some people like passive funds.
    Bosun wrote: »
    and also whether there are any 'league' tables for pension funds that compares performance after charges over say 1, 3 & 5yrs etc. If I can find a provider that consistently seems to outperform others I would be happy to switch and am happy to pay high charges if the fund performs well above average - Any and all comment appreciated!

    Past performance is no guarantee of anything. Really.

    You can't identify which funds will outperform in the future.

    You need to think about risk-adjusted return.

    Warmest regards,
    FA
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Bosun wrote: »
    Over the last three and a quarter years since transferring funds into this SIPP, it has grown by about 22.5% or an average of a fraction under 7%/year after all fees and charges. It is currently lower in value than it was a few months back, but I guess there will always be this volatility.
    Yes, volatility is a fact of life. Volatility becomes loss if you withdraw or sell a particular investment during a down time and if the volatility has taken it below the original value. Over time the general upward trend for mainstream investments gradually means that the prospect of a loss falls, as the amount of negative volatility it takes to get below the purchase price increases.

    7% isn't particularly impressive in a bull market. It's more like the long term average of both bull and bear markets for equities. UK stock market long term average before costs has been a bit over 5% plus inflation.
    Bosun wrote: »
    I recently spoke to a friend who is an advisor for St James Place and by way of comparison I asked him what sort of returns their funds were making. His reply somewhat surprised me, as he replied that over the last four years they had returned an average of over 11% pa after charges! (I'd be interested if anyone can substantiate this!)
    That's not unreasonable since we've been in a bull market since late 2008/early 2009.
    Bosun wrote: »
    So, my question is firstly whether my fund is 'doing OK'
    Not horribly bad but a global equity tracker would probably have done better. A global developed market tracker excluding the UK made 51.09% over three years.
    Bosun wrote: »
    and also whether there are any 'league' tables for pension funds that compares performance after charges over say 1, 3 & 5yrs etc.
    After fund charges numbers are readily available from places like Trustnet.

    I suggest that you consider use of a global equity tracker fund as the core of your pension investing.
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You can't identify which funds will outperform in the future.
    I don't agree because that assertion is contrary to well established and accepted facts and theories:

    1. I don't think that Robert Shiller should be made to return the Nobel Memorial Prize in Economic Sciences that he got in 2013 for demonstrating otherwise based on the cyclically adjusted price-earnings ratio being above or below historic average in various markets.

    2, I hope that even fans of tracker funds would agree with the assertion that in general a tracker fund with lower charges can be expected to perform better in future than a fund tracking the same index but with higher charges and the same tracking methodology.

    There are of course other ways for funds to outperform and it's been shown that underperformance persists and that on average active funds in New York outperform passive funds before taxes.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    jamesd wrote: »
    7% isn't particularly impressive in a bull market.

    How long have you been investing directly in shares?
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