Aviva pension funds - which world equity index fund?

PeteinSQ

AlanP_2 said:

PeteinSQ said:

AlanP_2 said:

Is this an employer scheme as they may have a discounted fee arrangement in place?

It is an employer scheme. I'm pretty certain that the fund we're in right now does have a discounted fee arrangement. Would that be spelled out in the fund factsheet or would I need to double check with Aviva? 

It wopn't be in the factsheet as that will be "List Price" as it were, Aviva could probably tell you what discount youir scheme gets but apart from academic interest is it going to make a difference if you know?

Not sure. I'm looking for a passive investment with the lowest possible fees as that should improve the total return so I guess it is relevant. 

Albermarle

Couple of points 
To be really sure of what you are paying in fees you will need to contact Aviva. Often these employer discounts are not visible in the paperwork .
Funds from traditional pension providers like Aviva, tend to be quite overweight in UK as traditionally many investors were not happy with their money being invested 'abroad' Most of these overweight funds have performed badly this year , especially if high in UK equities . 

Albermarle

BritishInvestor said:

PeteinSQ said:

BritishInvestor said:

PeteinSQ said:

BritishInvestor said:

PeteinSQ said:

Having read Lars Kroijer's work I have decided that I want to invest as described i.e. a mixture of global equities and UK bonds. 
The two key features of the required equity index fund are

1. that it should be allocated as per the relative size of the financial markets with no specific markets overweight
2. It should have the lowest possible fees

I appreciate that I could do this legwork myself but I wondered if anyone had already done this and could share their insight/research? 

The pension that I'm currently paying into is a lifestyle fund but it is maybe weighted too far towards bonds for my preference. I'd rather have 20% bonds and it seems to be quite a bit higher. I'm 38 so still quite a way off retirement.

Why just UK bonds?

To avoid currency risk?

vs a currency-hedged global bond fund?

I'm certainly not an expert investor, so I'm basing my thoughts on the views of Lars Kroijer. Won't the hedging come with additional costs? 

Potentially, but you can get currency-hedged global bond funds for ~15bps, so pretty competitive.

Although it is clear that a heavy UK weighting in equities will have cost you dearly this year , is there the same evidence that a heavy weighting in UK gilts and corporate bonds has had a similar negative effect . My impression is that a UK bias on the fixed income side is less of an issue, especially as you get more currency stability?

dunstonh

Fund factsheets show the default maximum charge.  They do not show personalised terms, which are nearly always cheaper.

For example, S4 funds could be 1% at default maximum but many people would have them at 0.6% before fund based discount which could take them down to 0.4%.  The factsheet would say 1%.

michaels

I was in a legacy Scottish widows fund that was also overweight UK.  Got round to moving most of it in June (When I had suffered the worldwide fall and missed out on the recovery from being overweight UK) and it has now trod water, 25% in money market funds and 75% in a global index tracker fund (I think fidelity) at ii chosen as this brings total charges down to about 15bps from the 75 I was paying with SW.  I have left a small amount with SW where my contributions go and will shift it out annually to save on fees (currently about 4k per annum saving).

fizio

vanguard all wordle etf and global bond funds - low cost and good diversification

PeteinSQ

fizio said:

vanguard all wordle etf and global bond funds - low cost and good diversification

I don't think Vanguard funds are available through Aviva sadly as I think that would be my preferred option, something like their 80:20 fund would be perfect and would do it all. I plan on putting the money I have to save in my ISA here, but as a higher rate taxpayer paying more into my pension seems like the sensible option at the moment. 

PeteinSQ

Thanks for all the interesting and useful comments that everyone has posted. Investing is really quite a complicated thing - how most people are expected to get it "right" I really don't know. I almost think this should be being taught in schools. 

dunstonh

fizio said:

vanguard all wordle etf and global bond funds - low cost and good diversification

Although Global Bonds are out of favour at the moment as a risk reducer due to currency fluctuations.

- how most people are expected to get it "right" I really don't know. I almost think this should be being taught in schools. 

Which subject should it replace?    A lot of things in life need self teaching or use you someone to do it for you.   They dont teach you how to do electrical work or plumbing but you can still DIY on those if you wish.   Ultimatly, you either put the effort in to learn or you get someone else to do it.

I don't think Vanguard funds are available through Aviva sadly as I think that would be my preferred option,

Some of Aviva's pensions have the Vanguard fund available.  However, do remember that Vangard are not best in every area.  They are popular on the internet as they have a cult following.   They have the best tracker in some areas but not in others.  Don't be hooked to a brand name.

Albermarle

PeteinSQ said:

fizio said:

vanguard all wordle etf and global bond funds - low cost and good diversification

I don't think Vanguard funds are available through Aviva sadly as I think that would be my preferred option, something like their 80:20 fund would be perfect and would do it all. I plan on putting the money I have to save in my ISA here, but as a higher rate taxpayer paying more into my pension seems like the sensible option at the moment. 

There is nothing magic about Vanguard funds . Any similar fund will have a similar result .