Assistance with improving my pension fund choices

danlightbulb

Ive finished my spreadsheet, took a while (mainly because I had to manually copy data from PDF pages onto a spreadsheet, would be alot easier if Aegon provided an extract instead of PDF files).

Anyway, I have a total of 83 funds available to me. I have logged the returns for each of the last five years and calculated the five-year average, the four-year average (excluding 2019/20 as its been an odd one) and the variance of the five years. I have then sorted it by the five-year average returns, highest first.

Out of the 83 funds, mine are ranked 50th and 79th in terms of performance. That's pretty awful (and disappointing that the company I work for didn't put more effort into selecting better funds when they set all this up). Anyway, it shows that I should put the effort into swapping them.

Whilst the better performing funds tend to have more variance, it isn't universally true and there are plenty in the top half that are very consistent, as well as good performing.

My initial thoughts, going off what people have said here so far are:
* I feel that a fixed 50/50 split of UK to global equities is at best limiting and at worst possibly detrimental. There are some funds that don't fix the split, or alternatively I could diversify and invest in a small number of similar UK/global equity funds with different mixes.
* There are one or two funds I particularly like the look of as they stand out, for example the Islamic global equity index, which has performed well (ranked 2nd out of 83) with very low variance. I am interested in putting some of my investment into these one or two stand out funds.
* The market advantage fund I have 30% in, which ranked 79th out of 83 funds - i'm not seeing why I should keep this. There are several bonds/gilts funds which have performed better and are badged at the same risk level. One that stands out is the over 5 year index linked gilt index which comprises UK Government bonds. This fund is ranked 25th out of 83 on my list.
* Should I put a small amount into high variance funds such as gold or emerging markets? These funds have done very well over the last 5 years although are badged as highest risk.

I've also done a quick calculation about how much I will invest over the next 25 years and what average return I would like. I would like to hit a yearly average of between 8 to 10% returns. That's possible looking at quite a few of these funds, although as I approach retirement  (10 years out?) I would have to move into lower risk funds. That is c.15 years away still.

So what's my next step? Happy to share my spreadsheet if it helps.

danlightbulb

Im trying to work out what my current mix is for my existing funds but having trouble.

For example, the market advantage fund doesn't provide the information on what the mix is geographically, instead showing two charts - one for capital allocation and one for risk allocation:
https://www.aegon.co.uk/content/dam/ukpaw/documents/Standard_B3R1YM6.pdf

Whereas my other current fund shows a geographical breakdown as well as a sector allocation:
https://www.aegon.co.uk/content/dam/ukpaw/documents/Standard_B4MSMG9.pdf

How do I determine what my current portfolio is with this information?

Linton

danlightbulb said:

Im trying to work out what my current mix is for my existing funds but having trouble.

For example, the market advantage fund doesn't provide the information on what the mix is geographically, instead showing two charts - one for capital allocation and one for risk allocation:
https://www.aegon.co.uk/content/dam/ukpaw/documents/Standard_B3R1YM6.pdf

Whereas my other current fund shows a geographical breakdown as well as a sector allocation:
https://www.aegon.co.uk/content/dam/ukpaw/documents/Standard_B4MSMG9.pdf

How do I determine what my current portfolio is with this information?

You can find what a fund invests in from https://www.morningstar.co.uk/uk/.  Finding funds on morningstar can be a bit tricky, I usually Google "<fund name>  morningstar".  For index tracker pension funds you may have to search for the index name rather than the specific fund.  Having found your fund click on "Portfolio" on the list of options on the LHS.   

Chickereeeee

You could have saved yourself a bit of of time by going to Trustnet, as mentioned before.  There, using the tools provided, you can compare the performance of all your available funds and.many more, over various timescales, up to 10 years.
At the moment you seem to be just looking at 4 years (5 minus last 12 months) which is not enough to show how funds perform over different market conditions.

danlightbulb

@Linton thanks, I have tried looking for my funds on there and the information appears sketchy. What is the core information I need to know about each fund? eg:
* its geographical split?
* split between large, med, small and emerging equities?
* how much cash, bonds, commodities, property each fund holds?
* the individual companies that the fund is invested in and how much, eg Microsoft, Amazon?

I need to try and bring this back to basics a bit I think. I've collected loads of information now about all the 83 funds I could choose from, but what am I trying to achieve in terms of a split? I've tried reading about this but there are as many opinions as there are funds.

Ive got this far before and given up because of not knowing what to do next.

dunstonh

danlightbulb said:

@Linton thanks, I have tried looking for my funds on there and the information appears sketchy. What is the core information I need to know about each fund? eg:
* its geographical split?
* split between large, med, small and emerging equities?
* how much cash, bonds, commodities, property each fund holds?
* the individual companies that the fund is invested in and how much, eg Microsoft, Amazon?

I need to try and bring this back to basics a bit I think. I've collected loads of information now about all the 83 funds I could choose from, but what am I trying to achieve in terms of a split? I've tried reading about this but there are as many opinions as there are funds.

Ive got this far before and given up because of not knowing what to do next.

If you dont know what you are doing and don't have the confidence and time to learn then your choice is really to stick to a basic multi-asset fund or employ and IFA to do it for you.

However, in response about what you need to know about each fund is an analysis of the underlying assets and its liquidity.  How it fits with your chosen investment strategy (.e.g if your model has 3.5% allocated to Japan then you want to make sure that at least 80% of the investments within the Japanese fund actually invest in the Japanese economy. Sometimes funds actually invest not in the country/region they say in the name but in firms that have dealings with the country/region but are based outside of the country/region).
The weightings/allocations should not be made up or random.  i.e. none of this "I think I will put 10% into 10 different funds" or "I will put 5% here, and 15% there".  There should be structure and process.   And you will need to keep this reviewed throughout the economic cycle as asset classes, sectors, countries and regions all change over the period and the weightings you would use today will be different to what you should use later.  For example, corporate bonds were seen as a risk reducer several years ago and they normally are (as long as you buy low risk ones and not high risk ones).  However, currently, they are not seen as much of a risk reducer and fluid asset allocation models have been reducing their allocations to them.

danlightbulb

Chickereeeee said:

You could have saved yourself a bit of of time by going to Trustnet, as mentioned before.  There, using the tools provided, you can compare the performance of all your available funds and.many more, over various timescales, up to 10 years.
At the moment you seem to be just looking at 4 years (5 minus last 12 months) which is not enough to show how funds perform over different market conditions.

I tried that but the information here is only over 5 years as well?
https://www.trustnet.com/factsheets/p/mz9j/aegon-blackrock-market-advantage-blk-pn
If this is telling me growth has been 18% over 5 years, then that's what I already know from the data on the fund PDF?

How do I know which of these funds is my one? They all have the same name apart from a suffix at the end which doesn't appear anywhere in my information:

danlightbulb

@dunstonh i recognise that there is tonnes of complexity to this. I am willing to learn but don't know what I need to go and learn, if that makes sense?

I have already compiled lots of information about all the funds I have available to me, but what do I do now with all that information?

I understand that I need to have a strategy, how do I come up with one?

At the moment my strategy was decided for me and the default funds I am in, whilst themselves diversified, have not done very well. Being 30% in a fund which has performed 79th out of the 83 funds available, over 5 years, does not seem like a good use of my money?

So whilst its true Im new to this, leaving it alone will surely be worse given what I know now about the funds I'm in?

Linton

See https://www.morningstar.co.uk/uk/snapshot/snapshot.aspx?id=VAUSA06J2K&tab=3&InvestmentType=SA for the Zurich equivalent.  I found it by typing "Russell World Equity" into the morningstar search field.  By clicking on the appropriate button you can get global country or region allocations, large vs small, sector allocations. and then selecting "Portfolio"

I personally use this type of info as the basis of all my investing, but as Dunstonh says in your situation most of the work can be done by a fund manager or index creator.  You can then use the allocation info to check for duplications, missing areas, and areas where you may have too much exposure..

Linton

danlightbulb said:

Chickereeeee said:

You could have saved yourself a bit of of time by going to Trustnet, as mentioned before.  There, using the tools provided, you can compare the performance of all your available funds and.many more, over various timescales, up to 10 years.
At the moment you seem to be just looking at 4 years (5 minus last 12 months) which is not enough to show how funds perform over different market conditions.

I tried that but the information here is only over 5 years as well?
https://www.trustnet.com/factsheets/p/mz9j/aegon-blackrock-market-advantage-blk-pn
If this is telling me growth has been 18% over 5 years, then that's what I already know from the data on the fund PDF?

How do I know which of these funds is my one? They all have the same name apart from a suffix at the end which doesn't appear anywhere in my information:

You can get up to 30 years of performance graphs of multiple funds from Trustnet, Tools, Charting
All the funds with the same basic name are the same - i ths case its the Blackrock 50/50 Global Equity Index fund sold with an Aegon badge in a pension wrapper.  The different "Classes" refer to differences in charging or perhaps the Ts&Cs.