Choice of Funds in my pension - any advice?

Miiade

My works pension dc scheme is with fidelity and up until recently I was un aware that I could change the fund choice myself and thought I had to stay with the default fund. I have recently added the bottom 3 funds and was wondering what peoples thoughts are about my choices?

A total of £377 a month goes in from myself and my employer and I am prepared to take higher risk. My age is 47 and I would like to retire as near to 55 as possible. I have a DB scheme which will pay out about 10k at 55, which added to my dc fund, may just be enough until state pension age.

Funds (current value 9.6k)

Fld black rock global equity 50/50 (default scheme) 78% of fund, monthly fund allocation going forward 25%
Fld black rock Us equity fund c1 5, 3.4% of fund value, 20% monthly allocation going forward
Fld black rock world (ex U.K.)equity fund d5, 6.5% of fund value, 40% allocation going forward
Fidelity Pacific Equity Fund class 5, 12% of fund value, 15% monthly allocation going forward

Is the above allocation diversified enough, too high risk etc, any thoughts comments welcome

I also have a small nest pension value 4K, which I pay in £60 a month into their higher risk fund, would members advice be that this extra £60 goes into the fidelity funds rather than nest.

Many thanks

SeniorSam

Wanting to retire at 55 needs a huge pension fund. How large is the pension fund at present?

Have you calculated what your income need will be between 55 and the time you receive your State pension and from then on for the next 20-40 years?

Miiade

Sam, fidelity fund value 9.6k, nest value 4K. DB pension will pay around 10k at 55 with lump sum around 40k.

Between 55 and state pension age estimate I need about £1500 net per month.

greatkingrat

Your choice of funds just appears to be duplicating each other. For example three of the four funds all invest in the same US Equities. 12% in Pacific seems rather high, especially as that is covered in the other funds as well.

With the relatively small fund size you have, you would be better off just picking one global fund.

MK62

Miiade wrote: »

Fld black rock global equity 50/50 (default scheme) 78% of fund, monthly fund allocation going forward 25%
Fld black rock Us equity fund c1 5, 3.4% of fund value, 20% monthly allocation going forward
Fld black rock world (ex U.K.)equity fund d5, 6.5% of fund value, 40% allocation going forward
Fidelity Pacific Equity Fund class 5, 12% of fund value, 15% monthly allocation going forward

Is the above allocation diversified enough, too high risk etc, any thoughts comments welcome

Regional equity allocation will come down to opinion in the end.....but if it was my portfolio I'd be worried that it would become a bit too heavy on US and APAC.

I'd probably be inclined to ditch the US and APAC funds and go with around 50% each in the remaining two......will still give you plenty of US and APAC exposure without going overboard.
Just one opinion though........

si2winit

The world (ex UK) fund has been good to me the last few years. Great returns.

Right now I have about 55% in black rock long term class 8 which leaned towards UK equities.

40% in the work (ex UK) fund mainly US equities

5% emerging markets mainly Asia.

Miiade

Thanks for the comments all.

Any thoughts about keeping my nest higher risk pension fund going at £60 a month? I have seen some negative feedback for nest on here because its funds are too conservative / dont offer enough choice.

dunstonh

My age is 47 and I would like to retire as near to 55 as possible.
snip
fidelity fund value 9.6k, nest value 4K.
snip
Between 55 and state pension age estimate I need about £1500 net per month.

You are missing some zeros on the value to achieve that. Unless your DB scheme is cost-effective to commence at 55 (i.e. without penalty or even allows it - many wont)

Fld black rock global equity 50/50 (default scheme) 78% of fund, monthly fund allocation going forward 25%
Fld black rock Us equity fund c1 5, 3.4% of fund value, 20% monthly allocation going forward
Fld black rock world (ex U.K.)equity fund d5, 6.5% of fund value, 40% allocation going forward
Fidelity Pacific Equity Fund class 5, 12% of fund value, 15% monthly allocation going forward

What is the point of having so many funds with such a small value? (even if the portfolio was structured, which it doesn't appear to be)

Is the above allocation diversified enough, too high risk etc, any thoughts comments welcome

Its seems very random. What investment strategy are you following?
what target volatility range are you looking for?
Where are you getting the asset allocation data from to build the portfolio?
Or is it just a bit random in selection?

Miiade

Dunstonh - thanks for feedback

You are missing some zeros on the value to achieve that. Unless your DB scheme is cost-effective to commence at 55 (i.e. without penalty or even allows it - many wont)

DB will pay around 10k at 55 after reduction, lump sump around 40k. Trying to get enough in my dc fund to give me total (all pensions) of £1500 net a month between 55 and 67.

All my funds were in the Blackrock 50/50 which has a high % U.K. stocks. My reason for the other 3 funds choices was to gain a higher worldwide % exposure.

I do not understand what target volatility range is and yes it is a bit of a random selection. The 3 additional funds were rated as either medium or higher risk in the ratings provided by fidelity.

FatherAbraham

Miiade wrote: »

My works pension dc scheme is with fidelity and up until recently I was un aware that I could change the fund choice myself and thought I had to stay with the default fund. I have recently added the bottom 3 funds and was wondering what peoples thoughts are about my choices?

A total of £377 a month goes in from myself and my employer and am I prepared to take higher risk. My age is 47 and I would like to retire as near to 55 as possible. I have a DB scheme which will pay out about 10k at 55, which added to my dc fund, may just be enough until state pension age.

Funds (current value 9.6k)

Fld black rock global equity 50/50 (default scheme) 78% of fund, monthly fund allocation going forward 25%
Fld black rock Us equity fund c1 5, 3.4% of fund value, 20% monthly allocation going forward
Fld black rock world (ex U.K.)equity fund d5, 6.5% of fund value, 40% allocation going forward
Fidelity Pacific Equity Fund class 5, 12% of fund value, 15% monthly allocation going forward

Is the above allocation diversified enough, too high risk etc, any thoughts comments welcome

I also have a small nest pension value 4K, which I pay in £60 a month into their higher risk fund, would members advice be that this extra £60 goes into the fidelity funds rather than nest.

Many thanks

Never mind about the geographic diversification, that portfolio is one hundred percent in equities, and you're only eight years from date you want to start drawing on it?

How come you haven't got any gilt funds or real-estate funds in there to reduce volatility?

dunstonh

I do not understand what target volatility range is and yes it is a bit of a random selection. The 3 additional funds were rated as either medium or higher risk in the ratings provided by fidelity.

The three additional funds are all high risk. None of the medium On a 1 to 10 scale (1 being cash) and 10 being conventional highest risk then they are risk 9.

You have to be wary of risk scales as you need to know the lowest and highest level to put context on the funds you are selecting.

When you build a portfolio that includes single sector funds, you should do it based on a strategy and structure. Picking funds and weightings at random can do more damage than good.