Pension fund advice

Gengis

I have a SIPP and the funds I have invested in are;

1                 Aegon BNY Mellon MA Growth ARC Pn

2                 Scot Eq BaillGiff 60/40 wweqpn arc –

3                 SE Uni LFS collection ARC– 

4                 Scot eq growth core ptfl ARC

It has preformed well until recently with the Baill Giff 60/40 preforming very badly.  When the market picks up and I recover the recent losses I intend to diversify a bit more and ditch the BG 60/40 and Sct EQ.

i was thinking about buying into Legal & General UK Ppt and Jupiter Asian Income I inc.

Does that sound a good idea?  Should i try to invest in more funds i.e. up to 6?  If so any suggestions - there was a good fund investing in UK agriculture.

thanks 

steve 

dunstonh

It has preformed well until recently with the Baill Giff 60/40 preforming very badly.  

BG funds are typically at the higher risk end of the scale in all their funds.  Plus, they tend to outperform for a lot of the cycle and then have a year or two where they significantly underperform when the cycle changes.

When the market picks up and I recover the recent losses I intend to diversify a bit more and ditch the BG 60/40 and Sct EQ.

Ironically, that will probably be the time you want to be entering a fund like that.

Does that sound a good idea?  Should i try to invest in more funds i.e. up to 6?  If so any suggestions - there was a good fund investing in UK agriculture.

Dont invest random percentages in random funds.   Build a portfolio to a strategy and process.  If you cant do that, then stick to multi-asset funds.   If you cant tell why BG funds have gone down the most then you shouldn't really be using single sector/focused funds.

Thrugelmir

Gengis said:

It has preformed well until recently with the Baill Giff 60/40 preforming very badly.  When the market picks up and I recover the recent losses 

Perhaps the fund will perform better than some of your other holdings in the months that lie ahead. 

Gengis

Thanks for the responses.  The 60/40 fund is based mainly in UK / North America.  One of the main companies ins Rio Tinto - some  analysts have recommended to buy shares in Rio now.  I spoke to a FA who provided some free advice and he recommended;

a)      I do not do anything at the moment;
b)      when the market picks up diversify and he recommended commercial ppty - the L&G ppty fund appears to be preforming well 38.3 cumulative performance over 5 years
c)    The Jupiter fund invests in Asia Pacific and again appears to have preformed well - 55.3 over 5 years (cumulative).

In light of what yo say I am unsure as to whether to stick with the 4 funds but include the other 2 i.e. L&G and Jupiter to spread the risk of the portfolio

I am 47 and my pension is £300k - i want to retire at 65 with a pension pot that will pay approx £30k gross per annum after 25% tax free.  My risk is as you say medium - but at the higher end.

Do you think the above strategy is a sound one?  Should i move to more medium risk funds when it is ok to do so?  And do you think my pension is on track?  

i was thinking of getting some FA - some are charging 2% of the fund but an FA has quoted me £170 net per hour and thinks this will take around 2 -3 hours work.  Do you think this is necessary / sound reasonalbe? 

thanks again for the responses

MallyGirl

If you do decide to pay for some advice make sure that you find an IFA (I is for Independent) not an FA who can only recommend products from the company they work for.
It does sound like you might save yourself from some kneejerk actions by engaging the help of a professional. Alternatively you could do some reading to educate yourself on the options. Many people successfully DIY with some investment of time to raise their understanding. Alternatively an IFA could more than cover their fee by stopping you from making an unwise move.
Do you have the time - and are you interested enough in doing it - to do some reading so that you can manage your own portfolio?

Gengis

thanks - sorry yes i was going to go with a IFA.  i think i might get some advice.

dunstonh

 I spoke to a FA who provided some free advice and he recommended;

a)      I do not do anything at the moment;
b)      when the market picks up diversify and he recommended commercial ppty - the L&G ppty fund appears to be preforming well 38.3 cumulative performance over 5 years
c)    The Jupiter fund invests in Asia Pacific and again appears to have preformed well - 55.3 over 5 years (cumulative).

a) that is generally the correct response as long as what you are currently invested in is suitable.  If it is unsuitable then making a change is sensible.
b) commercial property is out of favour in UT/OEIC or pension fund form due to the structure.  If you include property in your portfolio then holding it in a different way is probably better.
c) forget past performance.  The global economy is changing.  Globalisation is being unwound and industries that have been good or areas that have been good in recent history may not be in the future.

The 60/40 fund is based mainly in UK / North America.  

What are the fund names and your percentages allocated?    a 25% loss is higher than what most are seeing at this point.

Do you think the above strategy is a sound one?  Should i move to more medium risk funds when it is ok to do so?  And do you think my pension is on track?  

No.   Structure and process should be the key to portfolio building.  Not picking funds at random and using random percentages into each.

Gengis

Thanks Dunstonh - I think i will get IFA advice.  the fund overall has lost around 5-6% over the last 6 months - it was doing quite well up until Sept 2021

the fund is as follows;

SE Uni LFS Collection ARC 24.13%
Ageon BNY Mellon MA Growth ARC pn - 15.89%
Scot EQ BaillGiff 60/40 WwEQPn ARC - 35.22%
Growth Core Port - 24.61

the pension is a works one and is with Ageon Retireready.  

in light of the responses i will not take any further action and get some IFA advice.  thanks 

Albermarle

i was thinking of getting some FA - some are charging 2% of the fund but an FA has quoted me £170 net per hour and thinks this will take around 2 -3 hours work.  Do you think this is necessary / sound reasonalbe? 

2% as an initial charge is quite typical but on a fund of £300K , you can hopefully get that reduced .Normally they also want to move you on to their preferred platform, and  also manage your funds on an ongoing basis, but that is not absolutely necessary . Charge here should be max 0.75% pa but preferably 0.5% , especially as you are still adding to the funds.

The offer of £500 for a review is very much rock bottom pricing . Probably means you will get basic investment advice only, with minimal personal interaction ( no overall look at your finances, tax position, face to face meetings  etc ) and then you will have to follow through the recommendations yourself ( if you agree with them !) 

Gengis

thanks my pension has lost 8% in value - is that normal for the last 6 months?  just getting a bit concerned although i still have 15-18 years before i retire.  

dunstonh

8% loss over the last 6 months is ballpark.   Nothing to be concerned about at all. 

As things stand, there were bigger losses in 2020, 2018, 2015/16, 2008/9, 2000-2003