Finding correct funds with Royal London

dai_bach

Hi all,

I have a little question I hope someone will be able to help me with..

Having read around the monevator site, I have decided to try and follow one of their “lazy portfolios” for investing my DC pension pot. The plan I was going to base it on is the one called “Allan Roth’s Second Grader Portfolio”, although I think I might tweak it slightly to have more developed world equity.
Anyway, my problem comes about trying to find suitable alternatives to the fund’s suggested on monevator. The ones suggested are Vanguard FTSE UK Equity Index and Vanguard FTSE Dev World ex-UK Equity Index. My DC pension through my current employer is with Royal London and the funds I can chose are on the below link, which does not include any Vanguard funds:
https://www.royallondon.com/pensions/investment-options/fund-prices/

I may be being completely dense here, but looking at the list would RLP UK Equity (SEDOL 0783323) and RLP Worldwide (SEDOL 0789321) be suitable alternatives to the Vanguard funds?

Please let me know if I am barking up the wrong tree here.

Thanks!

Linton

They seem a reasonable match. However the RLP worldwide fund includes about 5% UK so if you want to match the underlying allocations in your chosen model portfolio you will have to modify the RLP fund % allocations appropriately.

dunstonh

Anyway, my problem comes about trying to find suitable alternatives to the fund’s suggested on monevator. The ones suggested are Vanguard FTSE UK Equity Index and Vanguard FTSE Dev World ex-UK Equity Index.

There are better trackers available than those now.

Are you able to understand investing enough to build a portfolio of single sector funds and kerep them rebalanced and adjust the weightings throughout the economic cycle?

dai_bach

dunstonh wrote: »

There are better trackers available than those now.

Are you able to understand investing enough to build a portfolio of single sector funds and kerep them rebalanced and adjust the weightings throughout the economic cycle?

Honestly.. probably not, no. I am quite new to this, but I thought the good thing about these trackers is that you don't need to be an expert in investing and can pretty much invest and leave it alone (save for re-balancing every now and then). Please let me know if this assumption is way off!

Thanks!

dunstonh

but I thought the good thing about these trackers is that you don't need to be an expert in investing and can pretty much invest and leave it alone (save for re-balancing every now and then). Please let me know if this assumption is way off!

Multi-asset funds are the ones that you can leave alone as they will self rebalance and adjust within the fund. Single sector tracker funds mean you are investing in a particular area. e.g. UK equity will just be UK equity. So, that means you start needing to choose how much goes in UK Equity. Then how much goes in US equity, Europe, Asia etc. And dont forget fixed interest securities (gilts, index linked gilts, High yield bonds, global bonds) or property.

Use of a tracker means you do not have to worry about fund selection from that sector (unless its getting the best tracker). However, it does mean you have to control the weightings going into each tracker.

Reluctantpensioner

Those two RLP funds have 1.0% annual charges. And a bid/offer spread of about 5%.
The investment strategy is not entirely clear either as at least one is passive and active: E.G. "The core of this fund is invested in a FTSE 350 Tracker fund with the remainder being invested in other actively managed UK equity funds."

As such they are not particularly comparable to the low cost Passive Vanguard Trackers you mention at .12%-.22% annual charge and no spread.

[BTW: I'm not saying better/worse here - that's a long argument. Just not comparable.]

DairyQueen

In this scenario I would transfer to whichever SIPP platform offers the lowest charges for my portfolio size and then invest in whichever low-cost Vanguard or Blackrock tracker met my risk profile. No need to rebalance.

Simples.

dunstonh

May well find that Royal London is cheaper. The contract since around 2005 onwards has been mono charged (AMC only. No initial charge/bid/offer spreads) and the AMC on internal funds is 1% before fund based discounts. It doesnt take much to get down to 0.45% (or lower). Plus, you get the annual profitshare which is around 0.15%.