Picking Funds

Moonwolf

For those asking the other funds are SL iShares UK Equity Index Pension Fund (30%) then 10% each in SL Invesco High Income Pension Fund and 10% in SL Blackrock ACS World ex UK Equity Tracker Pn Fd.

I'm in a lifestyle plan with a retirement date of 60 which starts moving funds to less volatile fund like Standard Life Deposit and Treasury Pension Fund from 55.

The risk profile questions gave me a score of 6 out of 20.

SonOf

For those asking the other funds are SL iShares UK Equity Index Pension Fund (30%) then 10% each in SL Invesco High Income Pension Fund and 10% in SL Blackrock ACS World ex UK Equity Tracker Pn Fd.

100% equity is high risk. Not low risk.

The risk profile questions gave me a score of 6 out of 20.

Were the funds you are in the chosen outcome ot match that score?
They dont match what anyone could consider low.

Lokolo

SonOf wrote: »

100% equity is high risk. Not low risk.



Were the funds you are in the chosen outcome ot match that score?
They dont match what anyone could consider low.

Indeed the iShares UK Equity Index is 5/7.

A 6/20 score I would be putting only 30% or so in equities.

Moonwolf

Until recently I haven't thought about it. I didn't choose any funds, just completed a risk questionnaire when I joined the pension.

MaxiRobriguez

Agree with the others, portfolio isn't low risk in the slightest. It's a 100% equity allocation of which 50% is allocated to US equities that has a CAPE of 30 at the moment.

The flexible plan reducing your equity allocation automatically at 55 is an interesting one too, I would have thought providers would start reducing lifestyle plans 10 years before target retirement date, not 5.

The right answer here is an IFA, who can sit with you and help you construct a portfolio that adequately suits you actual needs for the next few years.

[Deleted User]

Moonwolf wrote: »

For those asking the other funds are SL iShares UK Equity Index Pension Fund (30%) then 10% each in SL Invesco High Income Pension Fund and 10% in SL Blackrock ACS World ex UK Equity Tracker Pn Fd.

I'm in a lifestyle plan with a retirement date of 60 which starts moving funds to less volatile fund like Standard Life Deposit and Treasury Pension Fund from 55.

The risk profile questions gave me a score of 6 out of 20.

1. This mix of funds delivered great returns over the last 10 years.

2. Do you know why you have a “high income” fund? These are sometimes used by people who need income from the fund which you don’t.

3. Why do you have pairs to cover British and international stocks? Seems like unnecessary overlap.

4. “Risk” depends mainly on where you are in your career and what you are trying to achieve. If you need 50k annual income from the fund when you reach 60 then putting everything in bonds would be very risky.

Your portfolio is volatile and can easily lose over 50% in a bear market but good for long term returns as long as you can stomach volatility.

5. Suggest you learn about risk and then evaluate what your asset allocation should be between stocks and bonds. Here is a good book to get you started. https://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/1260026647

6. Once you know your desired asset allocation, you can’t go wrong with one of Vanguards Life strategy funds (or similar funds from other providers, e.g HSBC Global Strategy).

AnotherJoe

Moonwolf wrote: »

For those asking the other funds are SL iShares UK Equity Index Pension Fund (30%) then 10% each in SL Invesco High Income Pension Fund and 10% in SL Blackrock ACS World ex UK Equity Tracker Pn Fd.

I'm in a lifestyle plan with a retirement date of 60 which starts moving funds to less volatile fund like Standard Life Deposit and Treasury Pension Fund from 55.

The risk profile questions gave me a score of 6 out of 20.

So, when you are 60 you might have £250k in cash. And presumably you won't be buying an annuity but staying invested and drawing down money for another another 20 plus years. Probabiy not the best idea to be in cash for perhaps 30 years
As others have said, see an IFA.

Doglegger

AnotherJoe wrote: »

So, when you are 60 you might have £250k in cash. And presumably you won't be buying an annuity but staying invested and drawing down money for another another 20 plus years. Probabiy not the best idea.
As others have said, see an IFA.

This gets quoted a lot but it's not as simple as that with some work schemes. I am currently in the process of phase shifting for 7 years and derisking until chosen RA. I am in the "drawdown lifestyling" option but even this will derisk down to 10% equity come retirement day. This makes sense to me since I will have to transfer the pot to a drawdown provider as cash so couldn't afford a crash at that point.

SonOf

Doglegger wrote: »

This gets quoted a lot but it's not as simple as that with some work schemes. I am currently in the process of phase shifting for 7 years and derisking until chosen RA. I am in the "drawdown lifestyling" option but even this will derisk down to 10% equity come retirement day. This makes sense to me since I will have to transfer the pot to a drawdown provider as cash so couldn't afford a crash at that point.

It doesnt make sense.

You are going to be in drawdown for around 25-40 years. i.e. you will be continuing to invest for a very very long time. If you cannot afford a crash in your retirement planning then you should not be using risk based drawdown.

If you can afford it then you would remain invested through the changeover.

Doglegger

SonOf wrote: »

It doesnt make sense.

You are going to be in drawdown for around 25-40 years. i.e. you will be continuing to invest for a very very long time. If you cannot afford a crash in your retirement planning then you should not be using risk based drawdown.

If you can afford it then you would remain invested through the changeover.

Ah, sorry, one omission from that is there is a DB element to the pension and the TFLS is taken from this pot. A crash wouldn't be ideal at that point I would think.