Assistance with improving my pension fund choices

Thrugelmir

danlightbulb said:

Sailtheworld said:

There's nothing particularly wrong with your existing portfolio 

• Its too high in UK equities? (32% UK equities), which has dragged back performance.

Why do you consider UK equities to be too high a %?  Putting aside historical performance. As that boat has sailed. 

Sailtheworld

Thrugelmir said:

danlightbulb said:

Sailtheworld said:

There's nothing particularly wrong with your existing portfolio 

• Its too high in UK equities? (32% UK equities), which has dragged back performance.

Why do you consider UK equities to be too high a %?  Putting aside historical performance. As that boat has sailed. 

If you use the FTSE All World Index as an (imperfect) proxy of where the world allocates capital about 4% is allocated to the UK. An investor placing a higher proportion of capital in the UK is doing so because they expect better returns as a result. i.e. 4% vs 32% is quite a big bet that the smart (and not so smart money I suppose) have got this allocation wrong.

Nothing wrong with making that bet of course but for someone without the foggiest clue whether that allocation will lead to better returns (that someone being me and most other people) you may as well assume that the world's investors of capital have got it about right.

There might be other reasons for a home bias (currency risk maybe) but most people in the UK will already be very exposed to the UK economy without the need to increase it via investments.

My gut feel is that UK equities will continue to be a drag on performance and the UK economy will underperform her peers. I'm not confident enough to take a big punt but it makes it easy to keep my UK equity exposure closer to 4% than 32%.

Thrugelmir

Sailtheworld said:

Thrugelmir said:

danlightbulb said:

Sailtheworld said:

There's nothing particularly wrong with your existing portfolio 

• Its too high in UK equities? (32% UK equities), which has dragged back performance.

Why do you consider UK equities to be too high a %?  Putting aside historical performance. As that boat has sailed. 

If you use the FTSE All World Index as an (imperfect) proxy of where the world allocates capital about 4% is allocated to the UK. An investor placing a higher proportion of capital in the UK is doing so because they expect better returns as a result. i.e. 4% vs 32% is quite a big bet that the smart (and not so smart money I suppose) have got this allocation wrong.

Nothing wrong with making that bet of course but for someone without the foggiest clue whether that allocation will lead to better returns (that someone being me and most other people) you may as well assume that the world's investors of capital have got it about right.

There might be other reasons for a home bias (currency risk maybe) but most people in the UK will already be very exposed to the UK economy without the need to increase it via investments.

My gut feel is that UK equities will continue to be a drag on performance and the UK economy will underperform her peers. I'm not confident enough to take a big punt but it makes it easy to keep my UK equity exposure closer to 4% than 32%.

I'm interested in the OP's viewpoint.  Increasingly people seem to get hung up on brass plates these days. 

danlightbulb

Thrugelmir said:

I'm interested in the OP's viewpoint.  Increasingly people seem to get hung up on brass plates these days. 

a) its not something Ive ever thought about before. Until very recently, I didn't have enough understanding to risk messing with my pension fund allocation. I trusted what I had been done for me and didn't give it any thought.
b) then I analysed historic performance, which revealed that the funds I am in were comparatively poor.
c) this led me to come here and ask some questions and look at a range of other funds.
d) and finally led me to the view that my UK allocation is overweighted.

That's how I got here. To be honest I can't tell you why other than making my exposure more in line with the globalised proportions. But I couldn't tell you why it would be right to leave it alone either. Even I make a choice to leave it alone, its still a decision Im having to make. Why should I leave it at 32%?

Sailtheworld

Thrugelmir said:

Sailtheworld said:

Thrugelmir said:

danlightbulb said:

Sailtheworld said:

There's nothing particularly wrong with your existing portfolio 

• Its too high in UK equities? (32% UK equities), which has dragged back performance.

Why do you consider UK equities to be too high a %?  Putting aside historical performance. As that boat has sailed. 

If you use the FTSE All World Index as an (imperfect) proxy of where the world allocates capital about 4% is allocated to the UK. An investor placing a higher proportion of capital in the UK is doing so because they expect better returns as a result. i.e. 4% vs 32% is quite a big bet that the smart (and not so smart money I suppose) have got this allocation wrong.

Nothing wrong with making that bet of course but for someone without the foggiest clue whether that allocation will lead to better returns (that someone being me and most other people) you may as well assume that the world's investors of capital have got it about right.

There might be other reasons for a home bias (currency risk maybe) but most people in the UK will already be very exposed to the UK economy without the need to increase it via investments.

My gut feel is that UK equities will continue to be a drag on performance and the UK economy will underperform her peers. I'm not confident enough to take a big punt but it makes it easy to keep my UK equity exposure closer to 4% than 32%.

I'm interested in the OP's viewpoint.  Increasingly people seem to get hung up on brass plates these days. 

Given you proclaimed globalisation peaked years ago I would've thought you'd be more interested than most in brass plates.

Apart from outperformance (we don't know if that ship will sail or not) what's the advantage of a 32% UK exposure?