Critique of pension investment choices please

Mistermeaner

Would appreciate the views of you oh so knowledgeable people on my pension fund choices.

I'm 36, planning on retiring ASAP so maybe 20 years unless the goal posts move again.

I have about 100K in my pot and pay in circa £1300/month

Current investments are structured as follows. Current holdings and monthly investing proportions are the same:


NAME: Zurich Managed CS1
ISIN: GB00B6X4KM26
CHARGE: 0.40%
PROPORTION OF POT: 10%

NAME: Zurich Aquila World ex UK Equity Index CS1
ISIN: GB00B4KTZY32
CHARGE: 0.10%
PROPORTION OF POT: 50%

NAME: Zurich Aquila UK Equity Index CS1
ISIN: GB00B5WKMK60
CHARGE: 0.10%
PROPORTION OF POT: 15%

NAME: Zurich Threadneedle Asia CS1
ISIN: GB00B7RMKV88
CHARGE: 0.60%
PROPORTION OF POT: 2.50%

NAME: ZURICH UK PROPERTY CS1
ISIN: GB00B745PZ91
CHARGE: 0.60%
PROPORTION OF POT: 10%

NAME: Zurich Threadneedle American Smaller Companies CS1
ISIN: GB00B7GK8L93
CHARGE: 0.90%
PROPORTION OF POT: 5%

NAME: Zurich Threadneedle European Smaller Companies CS1
ISIN: GB00B7RR6W60
CHARGE: 0.90%
PROPORTION OF POT: 2.50%

NAME: Zurich Threadneedle UK Smaller Companies CS1
ISIN: GB00B80H2Z52
CHARGE : 0.90%
PROPORTION OF POT: 5%




These funds give an underlying allocation structure as follows:

UK: 23%
US: 39%
EU: 13%
Asia/pac: 12%
Property: 10%
Money: 2%
Fixed: 1%

bigfreddiel

Explain the reasoning behind your chosen funds please, but I think it's too complex.

Cheers fj

Mistermeaner

You have to bare in mind I am dealing with a limited number of funds to select from because this is a work scheme, so don't have full access to open market; this may explain in part why the fund selection looks a bit strange (NB: I have a separate S&S ISA which is primarily in likes of Vanguard to keep it simple and diversified)

Property is property because I want 10% in property for no other reason than I do (10%)

Small company funds (X 3) are because I wanted specific small company exposure in developed markets. There is no global small comp fund to choose. (12.5%)

The zurich managed fund is retained as it done well for me.... It has broad global allocation and was approx 50% of my total allocation previously. (10%). I don't like the amount of fixed interest it has in it so wanted to drop my holding.

The Zurich world ex UK is basically a passive global tracker (exc. UK) with a very low cost (50%)*

The Zurich UK fund is basically a passive UK tracker, similar to above with low cost (15%)*

* These 2 combined are 65% of my pot and are global passive trackers - it was lower cost to have these as separate funds than use one of the available vehicles in the pension that invested in both but at higher cost.

The asia fund was to increase exposure in this area vs. that offered by the global fund (2.5%) a small tilt is all

Hope that helps with reasoning.

I was after:

- global diversity,
- good dose of small company bias,
- bit of property,
- basically 100% equities
- low cost
- (with exception of above skewing) pretty much passive tracking


NB: There are a few funds that mix big and small companies and regions etc. but all the charges to me look excessive compared to what I have done with the above.

bigfreddiel

Okay I can see your reasoning, just make sure you have minimised any overlap in the funds you've gone for

Cheers fj

Mistermeaner

bigfreddiel wrote: »

Okay I can see your reasoning, just make sure you have minimised any overlap in the funds you've gone for

Cheers fj

Thanks. Only overlap is from the managed fund really (10%)

Oh and the Pacific/Asia fund which gives a slight skew to the allocation in the world ex UK fund.

Are you saying it looks ok?

Forgot to mention I have deliberately not got any specific emerging markets. I see them as expensive and v high risk.

masonic

Are 2.5% allocations likely to have any material effect on your portfolio's growth?

On a 20 year horizon, I'd consider a more significant emerging markets tilt. Edit: Perhaps not worth suggesting given your comment above, but do note the Threadneedle Asia fund is heavily invested in China (24% of the fund).

Linton

I dont see anything to strongly disagree with in your portfolio. And I like the way you are looking at portfolio allocation %s. 100% equity is appropriate for a 20 year timeframe if you are happy to ride the ups and downs. Some detailed comments though.....

Any fund of less than 5% should at least be questioned. With £100K is a £2.5K fund worth the effort? Will it make sufficient difference even if it is wildly successful? A good case can be made for the range of small companies funds as I dont see how the manager of a global SC fund can have a deep understanding of the companies being invested in. I am less sure of the extra Asia as it may duplicate the Asia holdings in the global fund.

What about looking at the allocation and diversification in terms of other factors than just geography? eg Large vs Small, industry sector diversification.

Japan Small Companies may be worth looking at.

You may be able to shave a bit off your UK %.

Broken_Biscuits

Might be worth asking about the tax implications on the pensions board. The figures you have given could see you surpass the 1 million limit. Be aware it wasn't always a million, they keep reducing the limit. A lot can happen in 20 years. You may want to gather a little more information and then consider reducing pension payments, particularly if you want to retire early? Might be in your interest to start building up a more accessible pot outside a pension.

Obviously don't stop paying into the pension but I think you are going a little overkill for someone with early retirement plans.