Aviva pension fund selection

masonic

granta said:

masonic said:

granta said:

masonic said:

Could you not just split between the Blackrock World (ex-UK) tracker and their own UK index tracker fund?

Thanks, that's a good suggestion I will look into this. Just means no other asset classes will feature.

The principle of combining funds to tune exposure to different regions/asset classes can probably be used to achieve what you want. For example, if your critique of your current fund is that it is too heavy on UK equities and bonds, then diluting it with the Blackrock World (ex-UK) tracker would address both of these. A 1:1 ratio would reduce the UK exposure close to neutral and cut the bond exposure to ~12%.

You also have options for standalone bond funds, property funds etc should you be inclined to diversify further.

I hadn't thought of that. So keeping a % in the existing multi-asset fund and moving the rest to the BlackRock World tracker so it was 50:50 (e.g. 10k in the multi-asset, and 10k in the world tracker, and new contributions split 50:50 too?)?

Yes, the proportions can be tweaked to get as close to your ideal allocation as possible.

granta

masonic said:

granta said:

masonic said:

granta said:

masonic said:

Could you not just split between the Blackrock World (ex-UK) tracker and their own UK index tracker fund?

Thanks, that's a good suggestion I will look into this. Just means no other asset classes will feature.

The principle of combining funds to tune exposure to different regions/asset classes can probably be used to achieve what you want. For example, if your critique of your current fund is that it is too heavy on UK equities and bonds, then diluting it with the Blackrock World (ex-UK) tracker would address both of these. A 1:1 ratio would reduce the UK exposure close to neutral and cut the bond exposure to ~12%.

You also have options for standalone bond funds, property funds etc should you be inclined to diversify further.

I hadn't thought of that. So keeping a % in the existing multi-asset fund and moving the rest to the BlackRock World tracker so it was 50:50 (e.g. 10k in the multi-asset, and 10k in the world tracker, and new contributions split 50:50 too?)?

Yes, the proportions can be tweaked to get as close to your ideal allocation as possible.

Thank you so much, that's a good bit of lateral thinking to sort the dilemma!

aroominyork

granta said:

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

I have been looking at this fund since, in a new job, I will start paying into it this month. I compared its equity allocation to Vanguard LifeStrategy and it performs just fine, so I would ignore the one star rating. You pay Aviva 0.6% if you use this fund; if you choose externally managed funds you still pay Aviva 0.6% (I think) plus the AMC of the managed funds. Since I use a core plus satellite approach, I will use the Aviva fund as part of my core allocation and balance it against my self-invested funds (held with Interactive Investor) to achieve the overall portfolio I want.

granta

aroominyork said:

granta said:

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

I have been looking at this fund since, in a new job, I will start paying into it this month. I compared its equity allocation to Vanguard LifeStrategy and it performs just fine, so I would ignore the one star rating. You pay Aviva 0.6% if you use this fund; if you choose externally managed funds you still pay Aviva 0.6% (I think) plus the AMC of the managed funds. Since I use a core plus satellite approach, I will use the Aviva fund as part of my core allocation and balance it against my self-invested funds (held with Interactive Investor) to achieve the overall portfolio I want.

Thanks. I have no idea what the star ratings relate to as on some of TrustNet's factsheets, the fund is consistently in the first quartile but still has a 1 star! Your approach is what I am aspiring too, core plus satellite, and eventual consolidation of some older pensions, but doing it in stages.
Maybe I have an employer discount as the total bundled cost for mine is 0.5%. And yes, the non-Aviva funds cost much more, so better to buy in SIPP.

aroominyork

Are your "older pensions" performing well or should you self-manage/consolidate them now? 

granta

aroominyork said:

Are your "older pensions" performing well or should you self-manage/consolidate them now? 

No they are not. This has all been part of my learning process of discovering what is inside the pension! And having not known anything about asset allocation, I discovered that one of the older pensions has been 75% UK equity! So I have rectified that as an interim step but plan to go further and consolidate and rid myself of older and higher fees.
The only bit I got right about pension planning is putting in a reasonably robust amount since the age of 22ish. It could be worse but it could be better. I am glad I have learnt this now than in 20 years.

george4064

masonic said:

Could you not just split between the Blackrock World (ex-UK) tracker and their own UK index tracker fund?

I believe the BlackRock World ex-UK Equity tracker tracks the FTSE Developed ex-UK, so that combined with the BlackRock UK equity index tracker would mean no exposure to emerging markets. Wouldn’t it be sensible to add some Developing Markets to the portfolio?

My partner’s pension is with Aviva, currently invested in the My Future Focus Growth Fund and I am helping her decide where to switch the assets to. My latest thinking is:

70% BlackRock World ex-UK Equity Tracker
20% BlackRock Emerging Markets Equity Tracker
10% BlackRock UK Equity Tracker

Albermarle

Maybe I have an employer discount as the total bundled cost for mine is 0.5%

There are a lot of different versions of Aviva pensions.

I had an ex workplace one that charged 1% ( + extra for certain funds ) They would not reduce it but said if I opened a newer pension with them  and transferred it , it 'may' have lower charges .

In the end I transferred it to a SIPP ,but left my other ex workplace pensions as they were, as the charges were more reasonable.

masonic

george4064 said:

masonic said:

Could you not just split between the Blackrock World (ex-UK) tracker and their own UK index tracker fund?

I believe the BlackRock World ex-UK Equity tracker tracks the FTSE Developed ex-UK, so that combined with the BlackRock UK equity index tracker would mean no exposure to emerging markets. Wouldn’t it be sensible to add some Developing Markets to the portfolio?

My partner’s pension is with Aviva, currently invested in the My Future Focus Growth Fund and I am helping her decide where to switch the assets to. My latest thinking is:

70% BlackRock World ex-UK Equity Tracker
20% BlackRock Emerging Markets Equity Tracker
10% BlackRock UK Equity Tracker

Yes, missed that it was FTSE Developed ex-UK rather than FTSE All World ex-UK. Adding the EM would therefore make sense.

masonic

Albermarle said:

Maybe I have an employer discount as the total bundled cost for mine is 0.5%

There are a lot of different versions of Aviva pensions.

I had an ex workplace one that charged 1% ( + extra for certain funds ) They would not reduce it but said if I opened a newer pension with them  and transferred it , it 'may' have lower charges .

In the end I transferred it to a SIPP ,but left my other ex workplace pensions as they were, as the charges were more reasonable.

Indeed, I'm in a version in which there is a 0.34% discount on fees if you stay in the default fund, so that's exactly what I have done, and have used other accounts to self-select funds. It's also possible to partially transfer out, so I've been able to ensure I'm not paying the percentage based fees on too large a sum.