Should I be concerned

gh67

First post so be gentle with me , I have a meeting next week with my IFA regarding my pension and I think its not doing great although he things differently. I have a pot of £330000 and in the last year its actually lost £10K, my pot is with Old Mutual in a COLLECTIVE RETIREMENT ACCOUNT. I have some friends with roughly the same size of pot with the Pru and theirs have made £16K, my IFA said he is confident this is doing ok and its just the price of the stock exchange thats effecting it.
I'm 50 just now and plan to retire in 6 years with this and another couple of company pensions so don't want to waste another year if its in the wrong place as I was thinking of changing to the Prudential cautious account that my friends have, I know this will have a charge but might be worth it.

El_Torro

Global stock markets have dropped in the last couple of months. Even so a 3% drop in the last year is a bit disappointing, though nothing to be too alarmed about.

I base this looking at global funds, which as of today are more or less flat vs a year ago. It really depends on what funds you're invested in, and exactly what timeframe you're looking at.

Does your 3% drop include a fee to your IFA, or to the fund or platform? This might help explain it.

It also depends on how your stocks are expected to perform in future. They might rebound quicker than what your friends have. Hard to comment without knowing more detail.

gh67

Yes the drop includes all fees, time scale i'm looking to start drawdown in roughly 6 years

Linton

Listen to your IFA. £10K out of £330K (3%) is just noise, markets can change by this in a week or two. The comparison will also depend very much on precisely which dates you use. For example looking at an average balanced fund:


12/12/2017-11/12/2018: -3%
1/12/2017 - 30/11/2018: -0.5%
1/10/2017 - 30/9/2018: +6%



Also note that although you start drawdown in 6 years time half your money may well not be touched for 20-25 years. Which is plenty of time for your investments to look very different.

El_Torro

gh67 wrote: »

Yes the drop includes all fees, time scale i'm looking to start drawdown in roughly 6 years

By timeframe I meant exactly when you are looking at the value of the fund, start and end point. Funds are volatile, so what week you look at can vary the outcome a lot. For example you could say that your funds have dropped £10k in the last year, but if you move the date by a week or two you might find you have gained £5k.


The exchange rate can also have an impact on your funds, if you have a lot of global (non UK) equities in your fund. If the pound suddenly gets stronger one day then the value of your non-UK equities will actually drop in pound terms.


Do you know how volatile your pension funds are, i.e. what level of risk your IFA is investing you at? Since you're going into drawdown in 6 years time (rather than buying an annuity) you might be OK to have a relatively volatile fund, if that's what you've instructed to your IFA.


As mentioned it's not really possible to say whether your IFA is investing your money correctly based on the information you have given. If you tell us what funds you are in that might help, though it's up to you whether to trust some random people on the Internet over your IFA

gh67

Thanks for the reply, I suppose i'm just panicking as I don't really understand it.

As for draw down I actually made a mistake it will be more like 8-10 years before I need to touch this pot as I have another pot that will give me a min 2 years pension as it stands.

gh67

El Torro,

Thanks again sorry I didn't realise what you meant by timescale, I have checked my fund regularly but and apart from the first 10 weeks its always been lower than I invested. I invested at the end of Nov 17.

As for how volatile they are i actually had a look at this last night and i have a couple that are high as in 7 and the rest are 5 and below.

I know what you mean about trusting a stranger on the internet but I wont be changing anything due to what someone on here tells me all I'm wanting is to make sure hes on the right road, heere is a list of my investments I wont put value next to them so might not help

Allianz Gilt Yield -U Income
iShares Overseas Government Bond Index (UK) -U2 Accumulation
Dodge + Cox US Stock -U Accumulation
Fidelity Asia -U Accumulation
Franklin US Opportunities -U Accumulation
HSBC American Index -U Accumulation
Invesco Corporate Bond (UK) -U2 Accumulation
Investec UK Alpha -U Accumulation
Kames Investment Grade Bond -U Accumulation
L+G UK Property Feeder -U Accumulation
M+G Feeder of Property Portfolio -U Accumulation
Majedie UK Equity -U Accumulation
Man GLG Japan CoreAlpha (Unhedged) -U Accumulation
Man GLG Undervalued Assets -U Accumulation
Schroder European -U2

El_Torro

gh67 wrote: »

El Torro,

Thanks again sorry I didn't realise what you meant by timescale, I have checked my fund regularly but and apart from the first 10 weeks its always been lower than I invested. I invested at the end of Nov 17.

As for how volatile they are i actually had a look at this last night and i have a couple that are high as in 7 and the rest are 5 and below.

I know what you mean about trusting a stranger on the internet but I wont be changing anything due to what someone on here tells me all I'm wanting is to make sure hes on the right road, heere is a list of my investments I wont put value next to them so might not help

Allianz Gilt Yield -U Income
iShares Overseas Government Bond Index (UK) -U2 Accumulation
Dodge + Cox US Stock -U Accumulation
Fidelity Asia -U Accumulation
Franklin US Opportunities -U Accumulation
HSBC American Index -U Accumulation
Invesco Corporate Bond (UK) -U2 Accumulation
Investec UK Alpha -U Accumulation
Kames Investment Grade Bond -U Accumulation
L+G UK Property Feeder -U Accumulation
M+G Feeder of Property Portfolio -U Accumulation
Majedie UK Equity -U Accumulation
Man GLG Japan CoreAlpha (Unhedged) -U Accumulation
Man GLG Undervalued Assets -U Accumulation
Schroder European -U2

That's a fair few funds. They look OK though, seem to cover the major areas without being too adventurous. Hard to assess the overall volatility without values but based on what you've said I think your IFA is on the right track.

nrsql

You also need to look at the valuation dates.
There can be a couple of days difference between the valuation updates of funds and more for the portfolio. Comparing two values on the same date can be misleading especially if the market is moving a couple of percent daily.

LHW99

Also if you invested in Nov. 17, 1 year is hardly long enough to evaluate performance, particularly after such a generally volatile year as said above.

gh67

nrsql wrote: »

You also need to look at the valuation dates.
There can be a couple of days difference between the valuation updates of funds and more for the portfolio. Comparing two values on the same date can be misleading especially if the market is moving a couple of percent daily.

You've lost me there I suppose thats why I have an IFA . Thanks for your reply