Pension - investment fund advice

LEP

I wish to self select my investment fund/s for my company based DC pension as opposed to the using the default ‘fund’.

I know that this comes with an element of risk hence my post here.

There are 8 funds I can chose from and can invest a percentage in any of them. I have listed the name of the fund and the sector it is in:

Standard Life Deposit and Treasury Pension Fund - ABI Deposit & Treasury

SL BlackRock Managed (50:50) Global Equity Pension - ABI Global Equities

SL BlackRock UK Equity Tracker Pension Fund - ABI UK All Companies

SL BlackRock Aquila Co Over 5Yr Idx Lkd Glt Pn Fd - ABI UK Index - Linked Gilts

SL BlackRock Aquila Connect Over 15Year Corp Bd Pn - ABI Sterling Long Bonds

SL BlackRock UK Focus Pension Fund - ABI UK All Companies

SL HSBC Amanah Global Equity Index Pension Fund - ABI Global Equities

SL Veritas Global Focus Pension Fund - ABI Global Equities


For background I am 42 and plan to retire no later than 60.

I have a DB pension (now closed) that I can draw at age 60 and is currently worth £7.2k/year

My DC pension pot is worth £24k and I currently pay in £600/month. I plan to significantly increase this in the near future to around £1500/month.

My current fund is invested in the default company scheme which has seen poor growth over the last 3 years I have paid into it…my pot is currently worth about £100 more than I have paid in …hence my desire to set up my own portfolio.

What mix of funds would you choose in my situation or perhaps you would stick with the default scheme I am in? I have also though about sitting down with a IFA which might be the best option?

Thanks

dunstonh

I know that this comes with an element of risk hence my post here.

The risks are not just investment risk but also knowledge risk and behaviour risk.

There are 8 funds I can chose from and can invest a percentage in any of them. I have listed the name of the fund and the sector it is in:

Is that all?
There isnt really enough to build a bespoke portfolio with a decent allocation split for single sector funds. You can just about do it with you making periodic rebalances but it is going to be relatively basic and the multi-asset solution may be the best option.

My current fund is invested in the default company scheme which has seen poor growth over the last 3 years I have paid into it…my pot is currently worth about £100 more than I have paid in …hence my desire to set up my own portfolio.

What research has led you to believe that is poor? Remember regular contributions take a while to show real gains. For example, Autumn 2015 saw a crash. The lead up to the referendum saw a correction. So, any units bought before those periods would have been at higher prices. Until the late 2016 gains occurred, they could well have been in a loss position.

When did you last get a value?
Which of the funds listed is the default one?

LEP

dunstonh wrote: »

The risks are not just investment risk but also knowledge risk and behaviour risk.



Is that all?
There isnt really enough to build a bespoke portfolio with a decent allocation split for single sector funds. You can just about do it with you making periodic rebalances but it is going to be relatively basic and the multi-asset solution may be the best option.



What research has led you to believe that is poor? Remember regular contributions take a while to show real gains. For example, Autumn 2015 saw a crash. The lead up to the referendum saw a correction. So, any units bought before those periods would have been at higher prices. Until the late 2016 gains occurred, they could well have been in a loss position.

When did you last get a value?
Which of the funds listed is the default one?

Yes there are just those 8 to choose from....the one I am in is not listed and is a bespoke one set up specifically for our company.

It may be my ignorance but wouldn't regular contributions over a 3 year period expect to seem some growth by now even accounting 'drip feeding' each month + dips? I last checked it today.

I know past performance is no indicator of future performance but 7 of those 8 funds have shown >10% growth over the last 3 years... the one I am in just 4%.

If sticking with it is the best option happy to go with that....I am just conscious that in a couple of years retirement will be only 15 years away and if it 'stagnates' (relatively) for too long it will be hard to play 'catch' up.

dunstonh

It may be my ignorance but wouldn't regular contributions over a 3 year period expect to seem some growth by now even accounting 'drip feeding' each month + dips? I last checked it today.

Depends on what you are investing in. Bonds are mostly down and if you are heavy in those then so will your value.

Regular contributions buy units each month. If the unit price goes up over 12 months then the value goes up. However, if a drop then occurs, all those units you bought at higher prices will now be priced lower. In the last few years there has been some volatility.

It is difficult to comment without knowing the existing fund.