Fidelity: stay, change, or move?

msnau

I am relatively new to investing. I've read Tim Hales book on investing, and also the Ramit Sethi's book on personal finance.

I have a question regarding my Fidelity Group Pension Plan. I'm not happy with its performance and was hoping for some advice on what to do: stay put, change funds, or move to SIPP?

The fund is called FIDELITY MULTI ASSET ALLOCATOR GROWTH FUND - CLASS 5. It has a TER of 0.5%.

Total contributions made is £92k - I stopped paying into it mid-2017. Since then, its value has dropped to £85k in 2018, and is currently valued at £89k in 2019. In short, I've continuously lost money in it and so losing confidence as well.

I have about 20 years until retirement. This fidelity pot represents my main retirement wealth so my risk attitude is medium for this pot. Fidelity will only let me change the funds to a limited number of funds (I'll paste this list at the bottom of my post).

I've also been dabbling in other smaller investments in my SIPP and ISA (held in interactive investor) - using a mix of trackers, and the Money Observer growth portfolios - with mixed results. I have had a higher risk attitude towards these smaller investments. I've currently breaking even on these.

For the fidelity fund:
1. Are the Fidelity losses expected given the stock market fell in late 2018? Am I overreacting?

2. From the list of available funds, I am considering changing to following:
[70%] Fid BlackRock World (ex-UK) Equity Fd C1
[10%] Fid BlackRock UK Equity Index Fund Cl 1
[10%] Fid Standard Life Global Real Estate
[10%] Fid BlackRock Emerging Markets Fund Cl 5
I regularly put cash into a Savings account which I am using using as a replacement to bonds.

3. Alternatively, should I move just move everything from Fidelity and put it into my SIPP, and invest in mix of trackers and active funds?



List of Fidelity funds:
Fid Aberdeen Life UK & Glbl 50/50 Eq Cl4
Fid Aberdeen Life UK & Glbl 70/30 Eq Cl5
Fid Aberdeen Life UK Equity Fund Class 4
Fid Baillie Gifford 6040 WorldWide Eq C5
Fid Baillie Gifford UK Equity Focus Cl5
Fid BlackRock Corp Bond Fd All Stocks C1
Fid BlackRock Emerging Markets Fund Cl 5
Fid BlackRock European Equity Indx Fd C1
Fid BlackRock Global Equity 50/50 Fnd C1
Fid BlackRock Global Equity 70/30 Fnd C5
Fid BlackRock Japanese Equity Indx Fd C5
Fid BlackRock Long Term Fund Class 1
Fid BlackRock Ovr 15Yr UK Gilt Idx Fd C1
Fid BlackRock Ovr 5Yr I-L-Gilt Fund C1
Fid BlackRock Pac Rim Equity Index Fd C5
Fid BlackRock UK Equity Index Fund Cl 1
Fid BlackRock US Equity Index Fund Cl 1
Fid BlackRock World (ex-UK) Equity Fd C1
Fid BR 3070 Cur Hdgd Global Equity Cl5
Fid Diversified Growth Pensions Fund Cl5
Fid Emerging Markets Eqty Pensions Fd C8
Fid European Equity Pension Fund Class 2
Fid F&C Responsible UK Eq Growth Fd Cl1
Fid Global Equity 5050 Pensions Class 2
Fid Global Equity 6040 Pensions Class 2
Fid Global Equity 70/30 Pensions Fd C2
Fid Global Focus Pensions Fund Cl4
Fid Standard Life Global Real Estate
Fid International Equity Pension Fund C2
Fid Japan Smaller Cos Pensions Fund C4
Fid Japanese Equity Pension Fund Class 2
Fid JPM Life Global Dynamic Fd Class 5
Fid JPM Life UK Specialist Equity Cls 5
Fid Lazd UK Omega (was UK Alpha) Fd Cl9
Fid Mellon Long Term Global Equity Cls 8
Fid Multi Asset Defensive Pens Fund Cl5
Fid Multi Asset Strategic Pens Fund Cl5
Fid Newton 50:50 Global Equity Fund Cl 5
Fid Newton Global Equity Fd C5
Fid Newton Long Corporate Bond Fund Cls5
Fid Newton Real Return Fund Class 5
Fid North American Eqty Pensions Class 2
Fid Pacific Equity Pensions Fund Class 2
Fid Pre-Retirement Bond Pensions Fd Cls5
Fid Riv and Merc UK Dynamic Eq Fund Cl9
Fid River and Mercantile UK High AlphaC9
Fid River and Mercantile UK Sml Comp C9
Fid Schroder QEP Global Active Value C9
Fid Standard Life Global Real Estate C5
Fid Standard Life Managed Fund Class 5
Fid Standard Life Overseas Fund Class 5
Fid Standard Life UK Equity Select Cl5
Fid UBS Global Allocation Fund Cl5
Fid UK Aggregate Bond Pensions Fund C5
Fid UK Equity Pensions Fund Class 2
Fidelity American Special Sits Pen Cls 4
Fidelity Artemis Global Capital Fund C9
Fidelity Artemis UK Special Sits Fnd C9
Fidelity BlackRock Cash Fund - Class 9
Fidelity BlackRock Consensus Fund Cl 1
Fidelity Cash Pensions Fund Class 5
Fidelity European Opportunities Pen C4
Fidelity Global Special Sits Pen Fund C4
Fidelity Henderson High Alpha UK Equity
Fidelity HSBC Life Islamic Fund Class 4
Fidelity Index Linked Bond Fund Class 5
Fidelity Invesco High Income Fund Cls4
Fidelity Invesco UK Growth Fund Class 9
Fidelity JPM Life Balanced Fund Class 5
Fidelity JPM Life Diversified Grth Fd C5
Fidelity JPM Life Global Equity Fund Cl5
Fidelity Lazard UK Omega Fund Class 9
Fidelity Legg Mason US Equity Fund Cls8
Fidelity Moneybuilder Growth Fund Class4
Fidelity Multi Asset Growth Pens Fund C2
Fidelity Newton Global Balanced Fd Cls 5
Fidelity Newton UK Equity Fund Class 5
Fidelity Pensions Annuity Fund Class 5
Fidelity Schroder Diversified Grth Fd C5
Fidelity Select Global Equity
Fidelity Special Situations Pensions C4
Fidelity Standard Life GARS Fund Class 5
Fidelity Threadneedle Property Fnd Cls 5
Fidelity UBS UK Opportunities Cl5
Fidelity UK Corporate Bond Fund Class 5
Fidelity UK Long Corp Bond Pen Fd C5
Fidelity WealthBuilder Fund Class 4
Fidelity Worldwide Special Sits Pen C4
Multi Asset Alloc Defensive Fund Class 5
Multi Asset Allocator Balanced Fund Cl 5
Multi Asset Allocator Growth Fund Cl 5c

ColdIron

msnau wrote: »

1. Are the Fidelity losses expected given the stock market fell in late 2018? Am I overreacting?

Yes I think you are. Those figures are in line with returns over the last couple of years which is, after all, a very short period. Markets are not linear, they go up and down, a truism that doesn't diminish with repetition

Albermarle

Are the Fidelity losses expected given the stock market fell in late 2018? Am I overreacting?

This fund is a pretty standard multi asset fund . As you have the growth version then this means you should see good growth in good times, but when markets fall your fund will also fall. Markets dipped sharply in 2018. Suggest you check the following before making any changes :
1) The value of the fund today as markets have largely recovered from the 2018 dip.
2) The growth of the fund during the previous few years and I think you will be pleasantly surprised , even taking into account ongoing contributions during that period

msnau

Thank you Albermarle and ColdIron. You’ve helped put things into perspective. I’ll continue keeping an eye on it. Hopefully, the fund will break even soon (it’s still below by a couple of thousand).

I downloaded the funds latest info doc. It’s now 60% equities, and 40% bonds.

This is very different to when I last checked in 2016: back then it was 45% equities, 20% cash, 20% commodities, 13% bonds, 7% property, and 5% Tactical overlay (what is that?).

I’m guessing the shift to 60:40 is a defensive move?

msnau

I’ve been giving the Fidelity group pension plan some more thought and also discussed it with someone more experienced in investments than me.

As the fund has not managed to recover from the recent market losses, and its strange switch to 40% bonds, I’m coming to the conclusion I should transfer it to my ii SIPP to save on admin charges and increase the choice of funds I can invest in.

I’m considering 70% passive in Vanguard Lifestrategy 100, and 30% in active funds (which I have not chosen yet - any advice on global active funds?).

I’m thinking of maybe splitting the 70% passive between vanguard LS100 and another global tracker which does not have a Uk bias.

As my full pension investments will be held in interactive investor, are there any risks to holding everything in one provider?

Instead of bonds, I’m holding cash in a savings account.

I have about 20 years to invest.

Alexland

My workplace pension is with Fidelity and the scheme rules allow me to partially transfer out a lump sum into a SIPP. This is useful as I get the benefit of salary sacrifice on workplace contributions but the lower running costs and greater choice of having the money into a SIPP. I only transfer out every couple of years once there is enough to be worth doing. All those mirror funds are likely to have higher charges than if you bought them in your SIPP.

FSCS compensation recently increased to £85k and while we have some larger accounts I wouldn't feel comfortable having above £250k in a single account or fund manager. Still it depends what proportion of your net worth you feel comfortable risking for lower fees.

If you want to go 100% equities without UK bias consider the HSBC FTSE All World tracker fund.

Alex

Albermarle

Just reading the OP again , something does not seem right :

Total contributions made is £92k - I stopped paying into it mid-2017. Since then, its value has dropped to £85k in 2018, and is currently valued at £89k in 2019. In short, I've continuously lost money in it and so losing confidence as well.

According to the info available from Fidelity/Morning star, this fund is currently 7% higher than in it was in mid 2007.
Also from March 18 to March 19 , it grew 8% .

msnau

I’m trying to figure out the same thing. I’ve double checked my contribution amounts and the current value of the fund is definitely below my contributions. I suspect there are some hidden charges?

Thank you for the HSBC recommendation - I’ve put it on my list.

That’s a good point about FSCS compensation. I’ve found iii to be the cheapest & broadest selection. Do people generally split out their investments in chunks of £85k in different providers in order to stay FSCS protected?

redux

Albermarle wrote: »

Just reading the OP again , something does not seem right :

According to the info available from Fidelity/Morning star, this fund is currently 7% higher than in it was in mid 2007.
Also from March 18 to March 19 , it grew 8% .

I wonder if the OP is looking at the last posted valuation statement, which might be some time ago, even Dec or Jan, rather than online the value this week.

(Two other providers recently sent me valuations on 31st March and 5th April).

LXdaddy

I don't think the £85,000 FSCS compensation limit has any real significance when it comes to this investment.

The key statement on their website that I base this on is "The money you invest with us either as a provider or as a distributor, or both, is protected by strict regulatory requirements, known as client money and asset rules. These rules apply whether you invest £8,000 or £800,000, and they also apply whether you hold all your investments with a single distributor, such as Fidelity, or you hold your investments through multiple distributors." (https://www.fidelity.co.uk/how-is-my-money-protected/#239217) The situation would be similar whichever platform you use.

I may be wrong of course but my thinking is that my money is invested in underlying shares with companies that have value and even if my platform goes bust the underlying shares remain (obviously I am at risk in a delay in gaining access in the event of a catastrophic failure of the platform while someone clarifies who owns what in the client assets)

msnau

Ok - that’s good know: as the underlying assets still exist and have value the £85k guarantee is not applicable.

Thanks for all your comments and thoughts. It’s helping me understand my investments a bit better.

I’ve now just checked online for the latest Valuation: it’s showing £89k as of 1 June. As I was looking at this figure, the number directly below it caught my eye: Rate of Return ‘+3.83%’. This is in accordance with what a previous poster said: the fund has had positive growth.

I’m still scratching my head as to why I have lost money. So I had a look at the transactions and contribution page and I think I understand a bit more what has happened: in 2015 my employer moved pension provider from Scottish Windows to Fidelity. I can only assume the negative growth has been carried over from the old provider Scottish Widows and the new Fidelity fund has indeed been growing but it has not yet managed to break even on poor performance of Scottish Widows?