Joining my company pension

frenchplonka

Will update later on guys with more details hopefully

frenchplonka

The funds in detail
Each of the investment options and the associated charge1 for investing in each fund is detailed
below. Each investment fund is charged an Annual Management Charge (AMC), which is
deducted from its assets. As the AMC is charged to a fund’s assets, it is reflected in the quoted
price for each fund on a daily basis, there is not an explicit annual deduction taken from your fund.

World Emerging Markets Equity Index Fund
(Cost of investing in this fund 0.45% pa)1
This fund invests in shares of companies in stock markets based in emerging economies currently
including China, India and Brazil. Although this fund is expected to grow in the long term,
investments in these economies can experience significant falls and increases in value in the short
term. As this entire fund invests overseas, this exposes your investments to changes in currency
exchange rates, and this fund does not attempt to reduce this currency risk.

Global Equity Fund
(Cost of investing in this fund 0.223% pa)1
This fund invests in the shares of companies on stock markets around the world. From year-toyear
your fund can go up and down in value quite significantly, but would be expected to grow in
the long term.
Compared to the current Global Equity (60:40) Fund, a greater proportion of this fund is invested
in overseas economies. As such, more of the underlying investment will be exposed to changes
in currency exchange rates. This currency exposure can provide additional risk and so the fund
takes steps to remove some of this.

Diversified Fund
(Cost of investing in this fund 0.35% pa)1
This fund invests in a wide range of investments and is not limited to just holding the shares of
companies on stock markets around the world. Through holding a range of different investments
the fund aims to provide capital growth that whilst not as high as that expected from company
shares in the long term, is expected to have less short-term fluctuation in value.

Pre-Retirement Fund
(Cost of investing in this fund 0.15% pa)1
This fund invests in bonds mainly issued by corporate bodies and the UK Government. It is
primarily aimed at members in the years approaching retirement who intend to buy a pension that
either receives no increase in payment, or increases at a fixed rate. This is because, typically, the
value of the fund’s bond investments tend to move in a similar way to the changing costs of buying
a pension, so this fund can help to minimise changes in the value of your pension as you approach
retirement.
The easiest way to understand bonds is to view them as a loan to an organisation which, in
return, pays a fixed rate of interest on that loan and then repays the amount borrowed.
The rate of return expected on this fund is lower than the expectation for the Global Equity,
Emerging Market Equity or Diversified Growth funds, but it is also expected to rise and fall in
value less sharply than them. For this reason it may also be suitable for members who wish to
experience lower fluctuations in value, but also accept they may receive a lower rate of return
over the longer term.
Appendix A

All-Stocks Index-Linked Gilts Index Fund
(Cost of investing in this fund 0.10% pa)1
Like the Pre-Retirement Fund this fund invests in bonds, although around half of the fund invests
in Government bonds where the rate of interest paid, and the capital repayment is linked to the
rate of inflation. As a result, this fund is primarily aimed at members in the years approaching
retirement who intend to buy a pension that receives increases in payment in line with inflation.
This is because the value of the fund’s bond investments may move in a similar way to the
changing costs of buying a pension, so this fund may help to minimise changes in the value of your
pension as you approach retirement.
The rate of return expected on this fund is lower than that expected for the Global Equity,
Emerging Market Equity or Diversified Growth funds, but it is also expected to rise and fall in
value less sharply than them. For this reason it may also be suitable for members who wish to
experience lower fluctuations in value, but also accept they may receive a lower rate of return
over the longer term.

Cash Fund
(Cost of investing in this fund 0.125% pa)1
Cash funds typically offer greater security for the money that is invested in them when compared
to many other types of investment. However, this also means that in the long term, the Cash Fund
is expected to provide a relatively low rate of return.
The Cash Fund holds a range of cash deposits with different financial institutions.
One of the most important things to note about the Cash Fund is that it does not operate like
a bank or building society deposit account which periodically receives a rate of interest. This is
because, like other investment options, the Cash Fund could still fall in value.

HSBC Amanah Fund
(Cost of investing in this fund 0.30% pa)1
This fund invests in company shares from around the world and is compliant with Islamic Shariah
principles.
1 The associated charge will be subject to change from time to time as advised by the scheme’s

frenchplonka

That was copied and pasted from the internet on the HR page the name escapes me but i think the pension is via Watson?

masonic

Well hopefully you don't need anyone else's opinion to rule out putting much into any of the last four funds.

The rest will come down to your attitude to risk. Getting hold of the factsheet for at least the Global Equity Fund would be sensible, so that you know the geographical spread and whether it already contains some exposure to emerging markets. Similarly, the Diversified Fund might be a suitable option if you were not wanting to go 100% equities, but you'd need to see what it invests in to make an informed choice.