Pension Review

asif10

Alexland wrote: »

I agree stick to a single fund solution unless there is a very good reason to complexify.

Start by determining you volatility tollerence - are you willing to run with 80% or 100% equities and see drops of 40% or 50% along a journey that over the long term is more likely to generate a higher return?

VLS80 is a great fund but if you want less UK exposure then consider Blackrock Consensus 85 or HSBC Global Strategy Dynamic. If you go 100% equities than consider the HSBC FTSE All World fund.

Remember to reduce your equities exposure gradually as you get closer to withdrawal to avoid selling low. For someone in drawdown 60% equities, 30% bonds and 10% cash seems to work well.

Alex

Thanks for the information Alex, I am glad I am getting consistent feedback which helps, I will also take a look at the funds you have mentioned.

I am planning to go for a fund which is predominantly in equity since I will be investing at least 17 years and should expect major drops in my investments during those periods.

My plan is, as you have mentioned, to reduce my equites holding as I approach my retirement age. I have already made a spreadsheet outlining what my cash/bond/equity should be as each year passes.

Once again thanks for you informative feedback.

Alexland

asif10 wrote: »

My plan is, as you have mentioned, to reduce my equites holding as I approach my retirement age. I have already made a spreadsheet outlining what my cash/bond/equity should be as each year passes.

Opinions vary on when you should do this risk profiling. I know some fund managers that do it gradually over the entire accumulation period and another that only starts reducing risk in the final 5 years.

You may find you need to use two funds to achieve the desired mix when you do your periodic rebalancing eg mixing 25% VLS60 and 75% VLS80 to create a 'VLS75', etc. Alternatively you could use a dedicated equity and a dedicated bond fund which might be simpler.

Alex