Which pension fund to choose?

IamWood

My current pension is with LG too  I put mine on:

L&G PMC World (Ex-UK) Equity Index 3

My SIpp is heavily UK equity weighted so that I'm fine without UK equity here.

Thrugelmir

Deleted_User said:

Currency hedging is a drag on long term performance because there is a cost involved. Having investments in different currencies actually improves diversification and reduces volatility. 

In summary, by hedging you would be reducing diversification AND paying for the pleasure.  Not recommended. 

Paying for insurance of any kind is a drag. Protects against the worst case scenario's though. Higher weighting towards home bias is one form of minimising this. Though isn't popular as would have detracted from recent returns. 

jamesd

Deleted_User said:

Currency hedging is a drag on long term performance because there is a cost involved. Having investments in different currencies actually improves diversification and reduces volatility. 

In summary, by hedging you would be reducing diversification AND paying for the pleasure.  Not recommended. 

That depends on circumstances. I think that my choice to switch from a global equity tracker to a Dollar-hedged developed world tracker when the Pound was low due to Brexit was a good move. That protected gains from the effect of the rise in value of the Pound and reduced my emerging market holdings. And with the Pound still at a low value in historic terms I'm content to have and pa the minor cost of keeping that hedge.

There are plenty of times when a currency hedge is a bad move but when your currency is around its historic lows isn't one of those times. Nor is now when it's still low, IMO.

[Deleted User]

jamesd said:

Deleted_User said:

Currency hedging is a drag on long term performance because there is a cost involved. Having investments in different currencies actually improves diversification and reduces volatility. 

In summary, by hedging you would be reducing diversification AND paying for the pleasure.  Not recommended. 

That depends on circumstances. I think that my choice to switch from a global equity tracker to a Dollar-hedged developed world tracker when the Pound was low due to Brexit was a good move. That protected gains from the effect of the rise in value of the Pound and reduced my emerging market holdings. And with the Pound still at a low value in historic terms I'm content to have and pa the minor cost of keeping that hedge.

There are plenty of times when a currency hedge is a bad move but when your currency is around its historic lows isn't one of those times. Nor is now when it's still low, IMO.

I am not a fan of timing the market.  If you don’t try to time then currency hedging is a drag on the overall performance in the long term. 

One could argue that GBP is “low”.  The alternative view is to say that its priced right to reflect actual currency flows and potential risks. Arguing with cumulative wisdom of market makers is possible but rarely profitable.  And the trend is quite clear https://www.exchangerates.org.uk/articles/1325/the-200-year-pound-to-dollar-exchange-rate-history-from-5-in-1800s-to-todays.html