AVIVA Work pension choosing funds?

bigadaj

cashbackproblems wrote: »

Ok I switched to the below:


Aviva Pensions BlackRock Aquila Emerging Markets Index Tracker S6
Aviva Pensions BlackRock Aquila European Equity Index Tracker S6
Aviva Pensions Fidelity Worldwide Special Situations S2
Aviva Pensions Stewart Investors Asia Pacific Leaders S6
Aviva Pensions Threadneedle Latin America S6

And your reasons are......

dunstonh

cashbackproblems wrote: »

Ok I switched to the below:


Aviva Pensions BlackRock Aquila Emerging Markets Index Tracker S6
Aviva Pensions BlackRock Aquila European Equity Index Tracker S6
Aviva Pensions Fidelity Worldwide Special Situations S2
Aviva Pensions Stewart Investors Asia Pacific Leaders S6
Aviva Pensions Threadneedle Latin America S6

So, you have gone for a very high rollercoaster approach. You are missing several sectors and dont say the weightings but if it was an equal amount into each (hope not) then you are looking at big losses during negative periods.

cashbackproblems

dunstonh wrote: »

So, you have gone for a very high rollercoaster approach. You are missing several sectors and dont say the weightings but if it was an equal amount into each (hope not) then you are looking at big losses during negative periods.

omg what sectors am I missing? I added UK tracker (15%). I didn't want to over diversify so just stuck to 5/6 funds. I have submitted these now so will have to wait to change further.


The weightings are


Aviva Pensions BlackRock Aquila Emerging Markets Index Tracker S6 20%
Aviva Pensions BlackRock Aquila European Equity Index Tracker S6 15%
Aviva Pensions Fidelity Worldwide Special Situations S2 15%
Aviva Pensions Stewart Investors Asia Pacific Leaders S6 15%
Aviva Pensions Threadneedle Latin America S6 20%
Aviva Pensions Aquila UK Equity Index Tracker 15%

dunstonh

The weightings dont appear to match any model I recognise. Are these just random weightings chosen by you or are you following a structured process?

How are you going to feel when you lose 60% of your pension value?
You dont say what your value is but on £20k, that would see your pension fall to around £8k. Can you handle that sort of loss as that is the sort of loss potential you are looking at with that very high risk spread.

Single sector funds are more work than multi-asset. You have to build a portfolio of single sector funds to give you the diversification. If you leave out sectors, then your portfolio becomes inefficient and likely to result in lower returns over the long term than the appropriate multi-asset fund.

Do you have the knowledge and understanding to do this?
How frequently will you be rebalancing?
is your model static or do the allocations get updated to reflect economic cycle etc?
Why are you using a worldwide fund and individual regional funds?
You are missing property and bonds and potentially certain regions depending on the internal allocation of the Fidelity fund. You have boosted some regions with the use of single sector funds but that will leave other regions short (such as US, Japan etc)

AnotherJoe

cashbackproblems wrote: »

omg what sectors am I missing?

How about the biggest economy in the world, the USA ????

westv

I'm always surprised when companies spend thousands over a period of years contributing to pensions but they can't find a few hundred for each employee to have advice regarding fund selection.

cashbackproblems

dunstonh wrote: »

The weightings dont appear to match any model I recognise. Are these just random weightings chosen by you or are you following a structured process?

How are you going to feel when you lose 60% of your pension value?
You dont say what your value is but on £20k, that would see your pension fall to around £8k. Can you handle that sort of loss as that is the sort of loss potential you are looking at with that very high risk spread.

Single sector funds are more work than multi-asset. You have to build a portfolio of single sector funds to give you the diversification. If you leave out sectors, then your portfolio becomes inefficient and likely to result in lower returns over the long term than the appropriate multi-asset fund.

Do you have the knowledge and understanding to do this?
How frequently will you be rebalancing?
is your model static or do the allocations get updated to reflect economic cycle etc?
Why are you using a worldwide fund and individual regional funds?
You are missing property and bonds and potentially certain regions depending on the internal allocation of the Fidelity fund. You have boosted some regions with the use of single sector funds but that will leave other regions short (such as US, Japan etc)

no I haven't used any model - where can I find them? Is there a site which helps u do this?


I just went by geographical split and chose the trackers as it spreads the risks geographically rather than a country specific fund, thanks I just realised I missed the USofA !


Its worth about 30k and I still have 30 years till retirement, so I was thinking I can ride out any large falls hence going for emerging markets and 100% equities. I will rebalance once a year.


I have also been investing in funds via HL for 8 years and done very well using this approach.

quotememiserable

dunstonh wrote: »

How are you going to feel when you lose 60% of your pension value?

Why would that happen? It's a high risk portfolio, but it would take a world crash twice as bad as the credit crunch to do that.

dunstonh

quotememiserable wrote: »

Why would that happen? It's a high risk portfolio, but it would take a world crash twice as bad as the credit crunch to do that.

Credit crunch and dot.com were both around 43% but that is mainstream markets. The OP has around half in emerging markets where 80% loss potential is there.

cashbackproblems

dunstonh wrote: »

Credit crunch and dot.com were both around 43% but that is mainstream markets. The OP has around half in emerging markets where 80% loss potential is there.

Eek. Do you have ideas of funds i can use to deversify the risk, maybe uk bonds?