Views on Royal London Governed Portfolio 16 July 2019 at 6:40PM edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning 110 replies 8.9K views

mcc100

Apologies if the answer is fairly obvious, but I just wondered what the procedure is for taking part of my TFLS from this fund when I'm 55 in a couple of months time.

Are units within the fund to the value of the TFLS sold?

SonOf

mcc100 wrote: »

Apologies if the answer is fairly obvious, but I just wondered what the procedure is for taking part of my TFLS from this fund when I'm 55 in a couple of months time.

Are units within the fund to the value of the TFLS sold?

It can vary with providers but typically you sell the investments down to allow the part of the fund you are crystallising (4 times the lump sum you are taking) and that is moved into a separate segment within the pension to allow your uncrystallised funds and crystallised funds to be kept apart.

You are on a Royal London thread, So, all you need to do with them is a form and they do the rest.

Mordko

A couple of questions to ask your IFA:

1. The bulk of this portfolio is in RLP Global Managed. Why has it underperformed it’s benchmark year in, year out? It’s otherwise tracking the benchmark, just a few percent below each period. Why would I not invest in the benchmark instead?

2. The fund is classified as “balanced”/“moderately cautious”/“moderately adventurous”

Balanced funds typically have at least 40% bonds. This fund has 20% bonds; the rest is in highly volatile assets, such as industrial property, commodities and stocks. What’s the potential for a drawdown and how it corresponds to my risk tolerance?

3. How do you justify recommending an investment with over 50% in a single market (UK).

SonOf

1. The bulk of this portfolio is in RLP Global Managed. Why has it underperformed it’s benchmark year in, year out? It’s otherwise tracking the benchmark, just a few percent below each period. Why would I not invest in the benchmark instead?

Global Managed the default but the IFA can change that fund to any of the other global managed funds.

The fund is lower risk than the benchmark and as the portfolio is volatility targetted, that will be intentional.

2. The fund is classified as “balanced”/“moderately cautious”/“moderately adventurous”

Balanced funds typically have at least 40% bonds. This fund has 20% bonds; the rest is in highly volatile assets, such as industrial property, commodities and stocks. What’s the potential for a drawdown and how it corresponds to my risk tolerance?

Irrelevant as the portfolio has a target volatility range linked to both risk profile and timescale. Individual funds should not be viewed in isolation.

3. How do you justify recommending an investment with over 50% in a single market (UK).

GP5 has 24.6% UK equities. Not over 50%.

mcc100

SonOf wrote: »

It can vary with providers but typically you sell the investments down to allow the part of the fund you are crystallising (4 times the lump sum you are taking) and that is moved into a separate segment within the pension to allow your uncrystallised funds and crystallised funds to be kept apart.

You are on a Royal London thread, So, all you need to do with them is a form and they do the rest.

Thanks SonOf. My investment is in RL Governed Portfolio 5 so it should be fairly straightforward then. I assume that I don't have to wait until my 55th birthday to crystallise the part of the fund necessary to take my lump sum.

cfw1994

mcc100 wrote: »

Thanks SonOf. My investment is in RL Governed Portfolio 5 so it should be fairly straightforward then. I assume that I don't have to wait until my 55th birthday to crystallise the part of the fund necessary to take my lump sum.

er....surely no: "Pension freedoms" only allows you to access them after 55

Unless you mean "can you post the paperwork in advance?", in which case perhaps you can, but they shouldn't act on it until you are 55.

I think there are exceptions for people who are seriously ill.

mcc100

cfw1994 wrote: »

er....surely no: "Pension freedoms" only allows you to access them after 55

Unless you mean "can you post the paperwork in advance?", in which case perhaps you can, but they shouldn't act on it until you are 55.

I think there are exceptions for people who are seriously ill.

No, I was just thinking of sending off the paperwork now as I wasn't sure how long the process took.

Mordko

The fund is lower risk than the benchmark and as the portfolio is volatility targetted, that will be intentional.

Interesting. Then the question to ask: why the heck is the fund manager using an inappropriate benchmark?

Mordko

GP5 has 24.6% UK equities. Not over 50%.

Commercial property/REITS = a type of equity. Of all equity exposure over 50% is in the UK.

Mordko

In general the approach of taking 3 correlated highly volatile assets and then claiming the resulting fund is “low volatility” is similar to what the insurance companies did when when they lumped different subprime mortgages and said “all is good!”