Compare Pension fund performance

pill84

Hi,
I have a personal pension with Standard Life but I was considering moving it to a Vanguard SIPP as I was attracted by the low fees etc... However, before I make the jump, I'd obviously like to compare pension/fund performance to see if it makes sense. Do you know if there a website that I can use to compare pension/fund performance?
Thanks in advance...
Standard Like Pension fund name is: 'Standard Life Managed Pension Fund', Profile name '3BALANCED UNIVERSAL'.
Vanguard is: 'Target Retirement Fund 2040'.

JohnWinder

I haven't compared their performance, and I'll risk writing this before anyone does, but is it wise or even helpful to compare their performances? I can't see that it is.

I can't see UK/non-UK equity split for Standard Life, but that and other components are likely in different proportions from the Vanguard fund. So how could anyone reasonably conclude that one fund was better than the other based on their performances if they have different compositions and thus different amounts of risk? The only valid comparison would be to measure their performances, AND their risks, and compare their Sharpe ratios or similar. We await someone posting that data.

And if one of the two happened to have had a better returning mix over the last 3, 5, whatever years, does anyone know that that is going to be the better mix for the next 20 years?

Further, if the two funds were made up of the same split of UK/non-UK, stocks, bonds and whatever, comparing them would show near parallel returns, differing only by the fee difference which at face value looks pretty big (about 1% compared with 0.24%).

The Vanguard fund is 90% index tracking, so you only need to check that the underlying funds are tracking their indices closely. And you probably don't even need to do that, because if they weren't (and they're famous for achieving it) it would be all over the financial press.

It's a no-brainer, surely, or you have some in each to diversify the institutional risk, not necessarily equally.

gm0

There are fund rating web sites. Morningstar. Trustnet being just two.

However, depending upon your particular fund and pension arrangement it may not be possible to do the comparison on an exact net fee basis.  Certainly for occupational pensions the funds are often not on the sites at all (mine are not) or something similar is but it is not the actual one and not on the correct charging basis.  In your case with a personal pension and SL fund - hopefully you will find it.  Try and match up the fund identifiers (there are several codes on a fund factsheet KIID)) with one of the comparison sites and the information provided about your fund by your current pension provider. 

Another poster has already commented on the significant challenges of "like for  like" comparison. 
Nonetheless how a fund performs in good times (such as the post crisis bull run or the recovery cycle since last February and how hard it dips in bad times - 2008, or the minor correction last year can be illustrative of relative behaviour in different conditions.    At least you can visualise how does "my fund" behave relative to the stockmarket over a longish period with different conditions.  It's not going to give you any kind of exact answer about what will happen but it can help with the consideration of volatility and risk appetite and returns foregone to achieve lower volatility.  This can be done mathematically but some people find graphs easier to digest.  You can move on to a more mathematical approach if and when that suits your decision making process.  Good luck

pill84

Thanks both for the detailed replies.... It's not as simple as I thought... lol.
Maybe I'll keep multiple pots as suggested to diversify risk.
However, what is the main reason people transfer then? Are they simply taking an educated guess on the new provider/fund having a greater future performance, or is it for reduced fees or ease of managing a single pot with one provider?
Thanks again.

dunstonh

I have a personal pension with Standard Life but I was considering moving it to a Vanguard SIPP as I was attracted by the low fees etc.

And how does your SL pension compare on charges?  SL workplace pensions are often very cheap.  Cheaper than Vanguard.   So, have you checked yours?
Vanguard is the fund manager for a number of SL's passive funds.

pill84

dunstonh said:

I have a personal pension with Standard Life but I was considering moving it to a Vanguard SIPP as I was attracted by the low fees etc.

And how does your SL pension compare on charges?  SL workplace pensions are often very cheap.  Cheaper than Vanguard.   So, have you checked yours?
Vanguard is the fund manager for a number of SL's passive funds.

If I've read the online pdf correctly it says 1.03% Total Annual Fund Charge.

[Deleted User]

pill84 said:

dunstonh said:

I have a personal pension with Standard Life but I was considering moving it to a Vanguard SIPP as I was attracted by the low fees etc.

And how does your SL pension compare on charges?  SL workplace pensions are often very cheap.  Cheaper than Vanguard.   So, have you checked yours?
Vanguard is the fund manager for a number of SL's passive funds.

If I've read the online pdf correctly it says 1.03% Total Annual Fund Charge.

Too much. Uncompetitive. 

dunstonh

pill84 said:

dunstonh said:

I have a personal pension with Standard Life but I was considering moving it to a Vanguard SIPP as I was attracted by the low fees etc.

And how does your SL pension compare on charges?  SL workplace pensions are often very cheap.  Cheaper than Vanguard.   So, have you checked yours?
Vanguard is the fund manager for a number of SL's passive funds.

If I've read the online pdf correctly it says 1.03% Total Annual Fund Charge.

Ignore the fund factsheet.   That is the default maximum charge.  Most of their relatively modern plans dont charge maximum. Workplace ones are nearly always discounted on that (some down to 0.1%-0.3%.    You need to be looking at the charges you are paying. Not the default maxmimum

Also, the 0.03% on top of the 1% are the transaction charges.   VLS funds are typically around 0.07% ish.  If you are going to compare like for like.

cfw1994

pill84 said:

Thanks both for the detailed replies.... It's not as simple as I thought... lol.
Maybe I'll keep multiple pots as suggested to diversify risk.
However, what is the main reason people transfer then? Are they simply taking an educated guess on the new provider/fund having a greater future performance, or is it for reduced fees or ease of managing a single pot with one provider?
Thanks again.

Nothing is ever simple, & no one here has a crystal ball either, & all we have are views/perspectives/opinions.

You mentioned the Vanguard “Target Retirement Fund 2040”.
Sounds like a “lifestyle” fund that has a glide path into the date of retirement: our default work Aviva fund offered similar - 100% equity to start - a broad global fund - then 10 years from retirement, starts lowering risk by moving toward “safer” investments (gilts, bonds, & a cash portion).
Many will be happy with that.
I opted out: my view was that I hope to have a lengthy retirement, and if I was happy with risk 20 years away from stepping off the rat race wheel, why wouldn’t I accept a similar risk closer to it.  Just my view, and balanced by the fact that I do have 2+ years cash (equivalent) buffer.  I know others will disagree (attitudes to risk!).
Diversifying is always reasonable behaviour.  I have always had my main pot split across 4-6 main funds, from less adventurous gilt & bonds through global tracker to more adventurous American.  As I got older, moving a bit more to the lower risk.  Sounds a bit like the “lifestyling” above, but much less “aggressively” into those lower risk funds.

On the topic of “what is the main reason people transfer”:
Over the past 5 years I transferred 3 smaller pots to my main Aviva work one because they didn’t have any guaranteed benefits, they weren’t particularly looking like they were performing well, & I felt if they added to the pot I was paying attention to (at least a quarterly check), they stood a chance of doing better.  All companies were “opted in” to use Origo Options, which mean the transfers (which I did) were pretty straightforward.

Now I am months from stepping away from a monthly pay cheque, I am moving a portion of the Aviva fund to another provider.  Reason for this is mostly around ease of access:
Aviva are not terrible, and I suspect may be typical, but will only commit to responding within 5 days.  If I go back with a clarification, it could be another 5 days.  if I set a drawdown at X, and want to raise it (for example) for one month, or perhaps by £500 pcm, it will mean more paperwork, which I know from TFLS crystallisations also takes them time to do.
With the other much smaller provider, should something like last February happen, I know I can “turn off the drawdown tap” within 2 days.  If I want increase or decrease the number, similarly rapid.  On the downside, they have far fewer funds to chose from.....on the upside, having had ISAs and family members with small pensions there over the past couple of years, we understand the fund choices and their likely behaviours.  

Sometimes, having the vast choice of options in a Subway* can be unnecessarily complicated: “ham or cheese, on white or brown bread?” can be easier to understand, and result in happiness!!

BritishInvestor

cfw1994 said:

pill84 said:

Thanks both for the detailed replies.... It's not as simple as I thought... lol.
Maybe I'll keep multiple pots as suggested to diversify risk.
However, what is the main reason people transfer then? Are they simply taking an educated guess on the new provider/fund having a greater future performance, or is it for reduced fees or ease of managing a single pot with one provider?
Thanks again.

Nothing is ever simple, & no one here has a crystal ball either, & all we have are views/perspectives/opinions.

You mentioned the Vanguard “Target Retirement Fund 2040”.
Sounds like a “lifestyle” fund that has a glide path into the date of retirement: our default work Aviva fund offered similar - 100% equity to start - a broad global fund - then 10 years from retirement, starts lowering risk by moving toward “safer” investments (gilts, bonds, & a cash portion).
Many will be happy with that.
I opted out: my view was that I hope to have a lengthy retirement, and if I was happy with risk 20 years away from stepping off the rat race wheel, why wouldn’t I accept a similar risk closer to it.  Just my view, and balanced by the fact that I do have 2+ years cash (equivalent) buffer.  I know others will disagree (attitudes to risk!).
Diversifying is always reasonable behaviour.  I have always had my main pot split across 4-6 main funds, from less adventurous gilt & bonds through global tracker to more adventurous American.  As I got older, moving a bit more to the lower risk.  Sounds a bit like the “lifestyling” above, but much less “aggressively” into those lower risk funds.

On the topic of “what is the main reason people transfer”:
Over the past 5 years I transferred 3 smaller pots to my main Aviva work one because they didn’t have any guaranteed benefits, they weren’t particularly looking like they were performing well, & I felt if they added to the pot I was paying attention to (at least a quarterly check), they stood a chance of doing better.  All companies were “opted in” to use Origo Options, which mean the transfers (which I did) were pretty straightforward.

Now I am months from stepping away from a monthly pay cheque, I am moving a portion of the Aviva fund to another provider.  Reason for this is mostly around ease of access:
Aviva are not terrible, and I suspect may be typical, but will only commit to responding within 5 days.  If I go back with a clarification, it could be another 5 days.  if I set a drawdown at X, and want to raise it (for example) for one month, or perhaps by £500 pcm, it will mean more paperwork, which I know from TFLS crystallisations also takes them time to do.
With the other much smaller provider, should something like last February happen, I know I can “turn off the drawdown tap” within 2 days.  If I want increase or decrease the number, similarly rapid.  On the downside, they have far fewer funds to chose from.....on the upside, having had ISAs and family members with small pensions there over the past couple of years, we understand the fund choices and their likely behaviours.  

Sometimes, having the vast choice of options in a Subway* can be unnecessarily complicated: “ham or cheese, on white or brown bread?” can be easier to understand, and result in happiness!!

"our default work Aviva fund offered similar - 100% equity to start - a broad global fund - then 10 years from retirement, starts lowering risk by moving toward “safer” investments (gilts, bonds, & a cash portion).

Many will be happy with that."

Doesn't Aviva "derisk" by switching into over 15 year index-linked gilts?

Albermarle

I do not have the specific info to hand, but having had money invested in various SL managed/default funds , it was clear that performance was lacklustre. It seems to affect all the funds, as they were often quite similarly invested when you looked under the bonnet, often with up to 40% in UK .
Here is a league table of default funds and SL was at the bottom.
https://www.ftadviser.com/pensions/2019/08/20/best-and-worst-pension-default-funds-named/
So it does seem worth at least persevering with comparisons, although it is difficult to not compare apples and pears , as already mentioned .