Company Pension Investment Choices

recruit18

Hi, I've been reading up on investing in low cost trackers vs high cost managed funds and started looking at how my company pension is invested. (The default lifestyle fund appears to be invested in 5 separate funds - the % allocation, risk rating and fees are below). The weighted fees of the overall lifestyle fund is 0.55%.

BlackRock ACS 50:50 Global Equity Fund 33.10% M2 0.16%
Standard Life Global Absolute Return Strategies Fund 25.30% ? 0.72%
Baillie Gifford Diversified Growth Fund 19.30% M1 0.97%
Threadneedle Pensions Property Fund 11.40% M1 0.95%
BlackRock Emerging Markets Index Fund 11.00% H 0.42%

Company Lifestyle Fund 100.10% M1 0.55%

I can alter the allocation of my own pot. In addition to the above funds I can also invest in the following Bond & Gilt funds

FIDELITY BLACKROCK OVER 5 YEARS INDEX LINKED GILT FUND L2 0.14%
TNT GROUP PENSION SCHEME FIXED INTEREST BOND FUND L2 0.23%

Now from what I have learned researching so far don't like the sound of heavily managed high fee funds like the standard life fund above. I'm thinking I should change to invest in the Blackrock 50/50 which appears to be a low cost tracker style equity fund (The aim of the ACS 50:50 Global Equity Tracker Fund is to seek to achieve a total return for investors by tracking closely the performance of the FTSE Custom Composite UK All-Share 50% Dev Europe ex UK 16.7% US 16.7% Japan 8.3% Dev Asia Pacific ex Japan 8.3%) and then diversify/de risk with an element of bonds/gilts, and avoid exposure to the other funds.

I'm 42, hoping to retire at 55 on min £25k/year. I'd say I'm a medium risk kind of guy. Current pot is £193k but recently I've got serious about retiring early and started putting in the full £40k into the pension each year.

Do you think this is a good idea? What % split between the 3 funds I've selected would be good for my age & risk profile and retirement aims? 70% equities, 15% bonds, 15% gilts??

Thanks for the great info I've read from this board already.

bowlhead99

SL GARS attempts to run all kinds of long/short or relative value strategies to make absolute positive returns regardless of the overall direction of equities and bond markets, and is something that can be used to reduce your portfolio's overall volatility.

Likewise, BG Diversified Growth is a mixed asset fund which aims to give you some long term growth (targeting 3.5% over UK base rates, net of fees) at a lower risk and volatility than equity markets (10% annual volatility over rolling 5 year periods) by using a lowish equity allocation and filling the rest with a diversified mix of non-equity assets such as government and corporate bonds, emerging market debt, property, forestry, commodities, infrastructure, insurance linked bonds and absolute return funds.

Your pension fund provider is saying that they will deliver the overall returns and volatility demanded by a 'medium risk kind of guy' by putting 45% into these funds, 11% into property, and the remaining 44% into equity indexes (being 16.5% UK index, 16.5% exUK developed index, 11.5% emerging markets index).

Whereas you are saying you don't like the idea of paying fees for emerging market equities, property funds, or those sophisticated diversified funds which use some equities alongside a mix of bonds and infrastructure, property and absolute return holdings.

So you will just replace the emerging markets equities fund with more UK and developed market equities exposure. And you will cut costs further by replacing the property holdings and those two 'highly diversified low-equities mixed asset funds' with a bit more developed world equities, a large slug of long dated UK index-linked gilts (cheap to manage but may well give only a zero or negative real terms return) and another cheap bond fund.

Your way would overall save 0.38% of fees on your portfolio, but you would be giving up growth potential by cutting out EM equities to replace with more developed exposure, and by cutting out that whole mixed bag of diversification within the BG fund to replace with UK IL Gilts. Just looking at those two changes, the loss of perhaps a couple of percent growth on a quarter of your portfolio reduces your potential gross returns by 0.5% ; whereas your final portfolio only shows cost savings of less than 0.4%...

Whether your cheap 'fixed interest bond' fund plus more developed market equities would beat a property fund plus SL GARS, is unknown. If you are put off by the fact that GARS is somewhat opaque and uses a large number of hard-to-comprehend exposures at an inevitably high cost, then by all means, don't have it as 25% of the portfolio - replacing it with some mix of other assets that does a similar job of providing low volatility growth is fine. The trick is finding them.

Doing a back of the envelope calculation on your retirement pot:

193k assuming about 2% growth in excess of inflation, for 12.5 years, is about £250k real terms;

40k of new money for the next 12.5 years is 500k, and on average each 40k will have been invested for half of the next 12.5 years, so that's about 6 years growth; again assuming about 2% in excess of inflation it would be about £550k real terms. So without being too exact, the total pot would be about £800k.

So overall if you want to take £25-30k from your pension in retirement it's going to be something like 3.1 to 3.8% of your portfolio. Of course, markets don't move in straight lines and whether a medium risk portfolio actually delivers an annualised return of inflation +2% over the next 13 years from current prices, is an unknown.

But in terms of split of assets to deliver that inflation +2% which you need for your goals, that is more about opinion.

Historically, people might say somewhat vaguely that lowish risk investments would allow you to keep up with inflation, medium risk investments would allow you to get inflation plus 2-3%, and higher risk investments would allow you to get inflation plus 4-5%+. However, those are averages and clearly it makes a difference whether your start point (for your £193k) is at the 'average' start point that this data has been taken from... or it is at the bottom of a market slump well below long term average prices (with greater prospective returns) or it is towards a market peak well above long term average prices (with lower prospective returns).

Most commentators would say that equity and bond prices are above historic averages in many parts of the world. Therefore, the 'rule of thumb' that a rate of return of x% can be expected from a medium to high risk portfolio (70% equities, 30% bonds) should probably be moderated downwards. The good thing is that if we do have a nice market slump for the next decade, your £40k a year will be getting invested at relatively low prices. So, pray for a global recession, as long as your job is not dependent on market buoyancy.

Going back to your allocation conundrum, using the funds you named (as I don't know what others you can access) I might go with about:
55% in 50:50 UK to developed ex-UK equities
10% in emerging markets equities
20% in the BG diversified growth fund
15% split between property and GARS (maybe 7.5:7.5 or 10:5)

Note that the BG and GARS funds will contain some equities so overall your equity or equity-like exposure will be at 70%+, giving you a pretty decent chance of achieving the 'inflation+2%' needed from a relatively high point in the markets. The problem with 70%+ equities is that 13 years is a relatively short timescale and if there is a big crash next year and another one a decade later (by which time you've already got almost all your 40k contributions into your pension) you might well need to work some more years or drop the initial pension drawings to under 25k.

The above suggestion isn't my ideal allocation but just what I would do given the limited information and choices you have given. For example I would prefer the UK:developed exUK to be more like 40:60 or 30:70 instead of 50:50, and I would prefer the UK part of that allocation to not be an index. If you think you would get a better mix of risk and reward by replacing the GARS bit with some arbitrary allocation of the two bond indexes you were looking at, go for it - but as I've already cut the GARS allocation for you to a tenth or less of the portfolio, the fee saving from moving to bond indexes would only be a few basis points.

Also note that your pension fund provider has already determined, probably using some science, that their weighted mix of holdings is a reasonable one to offer. If you want a higher risk offering, presumably they have one available too. To rip up the allocations put together by professionals because you heard on a blog that using indexing is better, and just use your own round-sum percentages for administrative convenience without a proper model backing it up, is something that most advisors would say is flawed. I have just used round figures myself and the very short list of funds you mentioned to make it easy for you to compare changes to what you were proposing, not because I think they are perfect or follow a specific model. I would run my own allocations in my own SIPP to get maximum flexibility of investment choice.

I do think it is valid to have a large chunk of the 'mostly not equities' part of the portfolio given over to a manager such as BG who say 'when constructing the portfolio, we consider the prospects for returns and risks over a 12 month investment horizon and asset allocation does vary over time depending on where we see the best opportunities'. Even though there is a fee consequence, I would expect that to have a better outcome than your proposal of an arbitrary fixed allocation between UK IL gilts and a bond index. YMMV.

I mentioned that trashing a professional portfolio to make your own out of cheap funds in round sum percentages without a real model is something that advisors would be cautious about. This is especially true when you have relatively short term (13 year rather than 23 or 33 or 43 year) goals.

There are people here with large pots who would say that they have done well with a very simple allocation and they have no need to overcomplicate things, and it's impossible to say they are wrong, because they have clearly done very well. Who needs property or infrastructure or relative value strategies when you can just whack it in 2 or 3 indexes of stocks and bonds?

Undoubtably that is fine in hindsight when bonds have been on a 30 year bull run and the main equity index you picked happens to be the best performing one in the world for you to have picked. Someone with a 13 year objective might not be so cavalier, and if much of your final target figure will be met by your putting lots of new money in during that 13 years (rather than by out and out growth), it's important that your investments are highly diversified to avoid risk of loss of what's invested so far.

Looking at your 13 year objective, the pot will perhaps actually be invested for another three, four or five decades thereafter, so we shouldn't be too short-termist - but you do want to leave work with a nice big pot behind you for day one of your retirement and if you find yourself well ahead of schedule in the next x years you could always moderate the risk down later.

Of course, if you are well ahead of schedule you can afford market losses, so may not want to bother, and it can be counterproductive to de-risk. Perhaps the real risk is the opposite way round, finding yourself well behind schedule due to a market downturn and subsequent low plateau before eventual gradual recovery, and trashing your portfolio mix because you have been scared off the higher risk parts of your portfolio. But hopefully you won't do that because you'll accept that your ongoing £40ks will be buying cheap assets. So you will probably be fine

Albermarle

Standard Life Global Absolute Return Strategies Fund 25.30% ? 0.72%

I had a similar life strategy fund also containing this fund.
It's performance is abysmal, and has completely failed to reach its objectives, whichever way you look at it . I understand that this is also the case for other Absolute return funds but I am not an expert.

barnstar2077

bowlhead99 wrote: »

SL GARS attempts to run all kinds of long/short or relative value strategies to make absolute positive returns regardless of the overall direction of equities and bond markets, and is something that can be used to reduce your portfolio's overall volatility.

Likewise, BG Diversified Growth is a mixed asset fund which aims to give you some long term growth (targeting 3.5% over UK base rates, net of fees) at a lower risk and volatility than equity markets (10% annual volatility over rolling 5 year periods) by using a lowish equity allocation and filling the rest with a diversified mix of non-equity assets such as government and corporate bonds, emerging market debt, property, forestry, commodities, infrastructure, insurance linked bonds and absolute return funds.

Your pension fund provider is saying that they will deliver the overall returns and volatility demanded by a 'medium risk kind of guy' by putting 45% into these funds, 11% into property, and the remaining 44% into equity indexes (being 16.5% UK index, 16.5% exUK developed index, 11.5% emerging markets index).

Whereas you are saying you don't like the idea of paying fees for emerging market equities, property funds, or those sophisticated diversified funds which use some equities alongside a mix of bonds and infrastructure, property and absolute return holdings.

So you will just replace the emerging markets equities fund with more UK and developed market equities exposure. And you will cut costs further by replacing the property holdings and those two 'highly diversified low-equities mixed asset funds' with a bit more developed world equities, a large slug of long dated UK index-linked gilts (cheap to manage but may well give only a zero or negative real terms return) and another cheap bond fund.

Your way would overall save 0.38% of fees on your portfolio, but you would be giving up growth potential by cutting out EM equities to replace with more developed exposure, and by cutting out that whole mixed bag of diversification within the BG fund to replace with UK IL Gilts. Just looking at those two changes, the loss of perhaps a couple of percent growth on a quarter of your portfolio reduces your potential gross returns by 0.5% ; whereas your final portfolio only shows cost savings of less than 0.4%...

Whether your cheap 'fixed interest bond' fund plus more developed market equities would beat a property fund plus SL GARS, is unknown. If you are put off by the fact that GARS is somewhat opaque and uses a large number of hard-to-comprehend exposures at an inevitably high cost, then by all means, don't have it as 25% of the portfolio - replacing it with some mix of other assets that does a similar job of providing low volatility growth is fine. The trick is finding them.

Doing a back of the envelope calculation on your retirement pot:

193k assuming about 2% growth in excess of inflation, for 12.5 years, is about £250k;

40k of new money for the next 12.5 years is 500k, and on average each 40k will have been invested for half of the next 12.5 years, so that's about 6 years growth; again assuming about 2% in excess of inflation it would be about £550k. So without being too exact, the total pot would be about £800k.

So overall if you want to take £25-30k from your pension in retirement it's going to be something like 3.1 to 3.8% of your portfolio. Of course, markets don't move in straight lines and whether a medium risk portfolio actually delivers an annualised return of inflation +2% over the next 13 years from current prices, is an unknown.

But in terms of split of assets to deliver that inflation +2% which you need for your goals, that is more about opinion.

Historically, people might say somewhat vaguely that lowish risk investments would allow you to keep up with inflation, medium risk investments would allow you to get inflation plus 2-3%, and higher risk investments would allow you to get inflation plus 4-5%+. However, those are averages and clearly it makes a difference whether your start point (for your £193k) is at the 'average' start point that this data has been taken from... or it is at the bottom of a market slump well below long term average prices (with greater prospective returns) or it is towards a market peak well above long term average prices (with lower prospective returns).

Most commentators would say that equity and bond prices are above historic averages in most part of the world. Therefore, the 'rule of thumb' that a rate of return of x% can be expected from a medium to high risk portfolio (70% equities, 30% bonds) should probably be moderated downwards. The good thing is that if we do have a nice market slump for the next decade, your £40k a year will be getting invested at relatively low prices. So, pray for a global recession, as long as your job is not dependent on market buoyancy.

Going back to your allocation conundrum, using the funds you named (as I don't know what others you can access) I might go with about:
55% in 50:50 UK to developed ex-UK equities
10% in emerging markets equities
20% in the BG diversified growth fund
15% split between property and GARS (maybe 7.5:7.5 or 10:5)

Note that the BG and GARS funds will contain some equities so overall your equity or equity-like exposure will be at 70%+, giving you a pretty decent chance of achieving the 'inflation+2%' needed from a relatively high point in the markets. The problem with 70%+ equities is that 13 years is a relatively short timescale and if there is a big crash next year and another one a decade later (by which time you've already got almost all your 40k contributions into your pension) you might well need to work some more years or drop the initial pension drawings to under 25k.

The above suggestion isn't my ideal allocation but just what I would do given the limited information and choices you have given. For example I would prefer the UK:developed exUK to be more like 40:60 or 30:70, and I would prefer the UK part of that allocation to not be an index. If you think you would get a better mix of risk and reward by replacing the GARS bit with some arbitrary allocation of the two bond indexes you were looking at, go for it, but as I've already cut the GARS allocation to a tenth or less of the portfolio the fee saving from moving to bond indexes would only be a few basis points.

Also note that your pension fund provider has already determined, probably using some science, that their weighted mix of holdings is a reasonable one to offer. If you want a higher risk offering, presumably they have one available too. To rip up the allocations put together by professionals because you heard on a blog that using indexing is better, and just use your own round-sum percentages for administrative convenience without a proper model backing it up, is something that most advisors would say is flawed. I have just used round figures myself and the very short list of funds you mentioned to make it easy for you to compare changes to what you were proposing, not because I think they are perfect or follow a specific model. I would run my own allocations in my own SIPP to get maximum flexibility of investment choice.

I do think it is valid to have a large chunk of the 'mostly not equities' part of the portfolio given over to a manager such as BG who say 'when constructing the portfolio, we consider the prospects for returns and risks over a 12 month
investment horizon and asset allocation does vary over time depending on where we see the best opportunities'. Even though there is a fee consequence, I would expect that to have a better outcome than your proposal of an arbitrary fixed allocation between UK IL gilts and a bond index. YMMV.

I mentioned that trashing a professional portfolio to make your own out of cheap funds in round sum percentages without a real model is something that advisors would be cautious about. This is especially when you have relatively short term (13 year rather than 23 or 33 or 43 year) goals. There are people here with large pots who would say that they have done well with a very simple allocation and they have no need to overcomplicate things, and it's impossible to say they are wrong, because they have clearly done very well. Who needs property or infrastructure or relative value strategies when you can just whack it in indexes of stocks and bonds? Undoubtably that is fine in hindsight when bonds have been on a 30 year bull run and the main equity index you picked happens to be the best performing one in the world for you to have picked. Someone with a 13 year objective might not be so cavalier.

Looking at your 13 year objective, the pot will actually be invested for another four or five decades thereafter, so we shouldn't be too short-termist, but you do want to leave work with a nice big pot behind you for day one of your retirement and if you find yourself well ahead of schedule in the next x years you could always moderate the risk down later.

Of course, if you are well ahead of schedule you can afford market losses, so may not want to bother, and it can be counterproductive to de-risk. Perhaps the real risk is the opposite way round, finding yourself well behind schedule due to a market downturn and subsequent low plateau before eventual gradual recovery, and trashing your portfolio mix because you have been scared off the higher risk parts of your portfolio. But hopefully you won't do that because you'll accept that your ongoing £40ks will be buying cheap assets. So you will probably be fine

Would just like to say that I am impressed with the effort you made to write this post!
:T

recruit18

Albermarle wrote: »

I had a similar life strategy fund also containing this fund.
It's performance is abysmal, and has completely failed to reach its objectives, whichever way you look at it . I understand that this is also the case for other Absolute return funds but I am not an expert.

Yes it doesn't seem to get good press

https://www.theguardian.com/money/2018/may/26/uk-biggest-fund-standard-life-gars-alan-miller

recruit18

bowlhead99 wrote: »

SL GARS attempts to run all kinds of long/short or relative value strategies to make absolute positive returns regardless of the overall direction of equities and bond markets, and is something that can be used to reduce your portfolio's overall volatility.

Likewise, BG Diversified Growth is a mixed asset fund which aims to give you some long term growth (targeting 3.5% over UK base rates, net of fees) at a lower risk and volatility than equity markets (10% annual volatility over rolling 5 year periods) by using a lowish equity allocation and filling the rest with a diversified mix of non-equity assets such as government and corporate bonds, emerging market debt, property, forestry, commodities, infrastructure, insurance linked bonds and absolute return funds.

Your pension fund provider is saying that they will deliver the overall returns and volatility demanded by a 'medium risk kind of guy' by putting 45% into these funds, 11% into property, and the remaining 44% into equity indexes (being 16.5% UK index, 16.5% exUK developed index, 11.5% emerging markets index).

Whereas you are saying you don't like the idea of paying fees for emerging market equities, property funds, or those sophisticated diversified funds which use some equities alongside a mix of bonds and infrastructure, property and absolute return holdings.

So you will just replace the emerging markets equities fund with more UK and developed market equities exposure. And you will cut costs further by replacing the property holdings and those two 'highly diversified low-equities mixed asset funds' with a bit more developed world equities, a large slug of long dated UK index-linked gilts (cheap to manage but may well give only a zero or negative real terms return) and another cheap bond fund.

Your way would overall save 0.38% of fees on your portfolio, but you would be giving up growth potential by cutting out EM equities to replace with more developed exposure, and by cutting out that whole mixed bag of diversification within the BG fund to replace with UK IL Gilts. Just looking at those two changes, the loss of perhaps a couple of percent growth on a quarter of your portfolio reduces your potential gross returns by 0.5% ; whereas your final portfolio only shows cost savings of less than 0.4%...

Whether your cheap 'fixed interest bond' fund plus more developed market equities would beat a property fund plus SL GARS, is unknown. If you are put off by the fact that GARS is somewhat opaque and uses a large number of hard-to-comprehend exposures at an inevitably high cost, then by all means, don't have it as 25% of the portfolio - replacing it with some mix of other assets that does a similar job of providing low volatility growth is fine. The trick is finding them.

Doing a back of the envelope calculation on your retirement pot:

193k assuming about 2% growth in excess of inflation, for 12.5 years, is about £250k real terms;

40k of new money for the next 12.5 years is 500k, and on average each 40k will have been invested for half of the next 12.5 years, so that's about 6 years growth; again assuming about 2% in excess of inflation it would be about £550k real terms. So without being too exact, the total pot would be about £800k.

So overall if you want to take £25-30k from your pension in retirement it's going to be something like 3.1 to 3.8% of your portfolio. Of course, markets don't move in straight lines and whether a medium risk portfolio actually delivers an annualised return of inflation +2% over the next 13 years from current prices, is an unknown.

But in terms of split of assets to deliver that inflation +2% which you need for your goals, that is more about opinion.

Historically, people might say somewhat vaguely that lowish risk investments would allow you to keep up with inflation, medium risk investments would allow you to get inflation plus 2-3%, and higher risk investments would allow you to get inflation plus 4-5%+. However, those are averages and clearly it makes a difference whether your start point (for your £193k) is at the 'average' start point that this data has been taken from... or it is at the bottom of a market slump well below long term average prices (with greater prospective returns) or it is towards a market peak well above long term average prices (with lower prospective returns).

Most commentators would say that equity and bond prices are above historic averages in many parts of the world. Therefore, the 'rule of thumb' that a rate of return of x% can be expected from a medium to high risk portfolio (70% equities, 30% bonds) should probably be moderated downwards. The good thing is that if we do have a nice market slump for the next decade, your £40k a year will be getting invested at relatively low prices. So, pray for a global recession, as long as your job is not dependent on market buoyancy.

Going back to your allocation conundrum, using the funds you named (as I don't know what others you can access) I might go with about:
55% in 50:50 UK to developed ex-UK equities
10% in emerging markets equities
20% in the BG diversified growth fund
15% split between property and GARS (maybe 7.5:7.5 or 10:5)

Note that the BG and GARS funds will contain some equities so overall your equity or equity-like exposure will be at 70%+, giving you a pretty decent chance of achieving the 'inflation+2%' needed from a relatively high point in the markets. The problem with 70%+ equities is that 13 years is a relatively short timescale and if there is a big crash next year and another one a decade later (by which time you've already got almost all your 40k contributions into your pension) you might well need to work some more years or drop the initial pension drawings to under 25k.

The above suggestion isn't my ideal allocation but just what I would do given the limited information and choices you have given. For example I would prefer the UK:developed exUK to be more like 40:60 or 30:70 instead of 50:50, and I would prefer the UK part of that allocation to not be an index. If you think you would get a better mix of risk and reward by replacing the GARS bit with some arbitrary allocation of the two bond indexes you were looking at, go for it - but as I've already cut the GARS allocation for you to a tenth or less of the portfolio, the fee saving from moving to bond indexes would only be a few basis points.

Also note that your pension fund provider has already determined, probably using some science, that their weighted mix of holdings is a reasonable one to offer. If you want a higher risk offering, presumably they have one available too. To rip up the allocations put together by professionals because you heard on a blog that using indexing is better, and just use your own round-sum percentages for administrative convenience without a proper model backing it up, is something that most advisors would say is flawed. I have just used round figures myself and the very short list of funds you mentioned to make it easy for you to compare changes to what you were proposing, not because I think they are perfect or follow a specific model. I would run my own allocations in my own SIPP to get maximum flexibility of investment choice.

I do think it is valid to have a large chunk of the 'mostly not equities' part of the portfolio given over to a manager such as BG who say 'when constructing the portfolio, we consider the prospects for returns and risks over a 12 month investment horizon and asset allocation does vary over time depending on where we see the best opportunities'. Even though there is a fee consequence, I would expect that to have a better outcome than your proposal of an arbitrary fixed allocation between UK IL gilts and a bond index. YMMV.

I mentioned that trashing a professional portfolio to make your own out of cheap funds in round sum percentages without a real model is something that advisors would be cautious about. This is especially true when you have relatively short term (13 year rather than 23 or 33 or 43 year) goals.

There are people here with large pots who would say that they have done well with a very simple allocation and they have no need to overcomplicate things, and it's impossible to say they are wrong, because they have clearly done very well. Who needs property or infrastructure or relative value strategies when you can just whack it in 2 or 3 indexes of stocks and bonds?

Undoubtably that is fine in hindsight when bonds have been on a 30 year bull run and the main equity index you picked happens to be the best performing one in the world for you to have picked. Someone with a 13 year objective might not be so cavalier, and if much of your final target figure will be met by your putting lots of new money in during that 13 years (rather than by out and out growth), it's important that your investments are highly diversified to avoid risk of loss of what's invested so far.

Looking at your 13 year objective, the pot will perhaps actually be invested for another three, four or five decades thereafter, so we shouldn't be too short-termist - but you do want to leave work with a nice big pot behind you for day one of your retirement and if you find yourself well ahead of schedule in the next x years you could always moderate the risk down later.

Of course, if you are well ahead of schedule you can afford market losses, so may not want to bother, and it can be counterproductive to de-risk. Perhaps the real risk is the opposite way round, finding yourself well behind schedule due to a market downturn and subsequent low plateau before eventual gradual recovery, and trashing your portfolio mix because you have been scared off the higher risk parts of your portfolio. But hopefully you won't do that because you'll accept that your ongoing £40ks will be buying cheap assets. So you will probably be fine

Thanks for the detailed reply. I'm going to read it a couple of times to mull things over.

What I'm struggling with is the advice I'm reading that there's lots of evidence that less than half of all managed funds outperform they benchmark over a 10 year period (partly due to higher fees) and there is no way to pick which funds will perform well. Therefore trackers are your best bet.I got the idea of mixing equity trackers and bonds/gilts from here...
https://monevator.com/9-lazy-portfolios-for-uk-passive-investors-2010/

All the funds I have access to I have quoted in my first post.

I also have approx £220k in other savings outside of pension which I'm planning to use to either retire earlier than 55, or as a cushion if I either lose my job or if when I retire we have a market slump and I want to leave all the pension invested waiting for a recovery.

Prism

recruit18 wrote: »

What I'm struggling with is the advice I'm reading that there's lots of evidence that less than half of all managed funds outperform they benchmark over a 10 year period (partly due to higher fees) and there is no way to pick which funds will perform well. Therefore trackers are your best bet.I got the idea of mixing equity trackers and bonds/gilts from here...
https://monevator.com/9-lazy-portfolios-for-uk-passive-investors-2010/
.

This is the debatable bit. You need to not pick the ones that won't do well and then its more of an open playing field. However, that said, no poblem at all sticking to index funds I would say.

You may also consider a partial transfer of your pot to a SIPP if you really want a better fund selection.

recruit18

http://www.kroijer.com

Is this guy wrong?

recruit18

Wish this investing/pension business was less complicated. Quick question. What is the logic with Vanguard Lifestyle funds and Monevator suggested portfolios mixing Bonds/Gilts with Equities....how do they tend to interact. Ie do bonds generally do well when equities are in a bear market?

Looks like the Standard Life Global Absolute Return Strategies Fund has been removed from our scheme now as I've noticed it's not an option to select now on the latest forms.

Prism

recruit18 wrote: »

http://www.kroijer.com

Is this guy wrong?

I disagree with some points he makes yes. However thats not really my main point, which is consider transfering some of your pension to a SIPP to access a better range of passive (or active) funds.

recruit18

Prism wrote: »

I disagree with some points he makes yes. However thats not really my main point, which is consider transfering some of your pension to a SIPP to access a better range of passive (or active) funds.

OK thanks - I'll do some research into SIPP's