Consolidating Pensions - Global Index Tracker

seanyshow

Hi guys, I'm new to understanding the world of pensions. I've been doing some research which suggested using a global index tracker fund via the likes of vanguard with low fees as good advice for a novice to see a return on investment many years down the line. I've been having a nosey through th vanguard website and to be honest i'm a little overwhelmed at the amount of funds which I can transfer my pensions over to. I was hoping someone here could help me select one. Im looking for something low risk for the next 25-30 years, low maintanence (cause I've no idea what i'm doing) Is the global index tracker good advice? If so, are there any good policies someone could recommend at Vanguard?

Any advice would be greatly appreciated.

A_T

Vanguard FTSE Global All Cap Index is probably what you want. But remember stock markets can crash.

seanyshow

Yeah I wanted to avoid one that was all shares and more of a mix of bonds and shares as I read those where considered a bit safer.

A_T

seanyshow said:

Yeah I wanted to avoid one that was all shares and more of a mix of bonds and shares as I read those where considered a bit safer.

the Lifestrategy range has mixed share\bond funds. There are also their Target Retirement Date funds

bostonerimus

You say "low risk for the next 25-30 years". Over such relatively long time you should be looking to take some risk so your investments have more chance to grow. Choice is often the enemy of the novice and they get paralyzed and worry that they are missing something, but the truth is there is a vast amount of duplication in investment funds. So I would concentrate on the Vanguard Life Strategy series of funds as these give you an all in one investment portfolio containing several tracker funds. If you are investing over 30 years you probably want something with a majority of equities like VLS60 or 80. Take some time to understand the funds contained within the VLS series and how they work.

Albermarle

I was hoping someone here could help me select one. Im looking for something low risk for the next 25-30 years

Although nobody can know the future, but all historical data would say that holding low risk funds instead of high risk ones over such a long time period, will mean you will miss out on significant growth in your investments. Risk in this context ( using mainstream investments) really means volatility, rather than risk of total loss. In other words higher risk investments will bounce up and down more sharply in the short and medium term. If you do not have the stomach for this, then you can go more medium risk.

There are many funds other than Vanguard, but as you are currently looking there, then Life Strategy 60 is medium risk and the 80 is medium/high.

You could also look at the 'target retirement funds ' These start off higher risk and then change as you get nearer your retirement date.

dunstonh

Yeah I wanted to avoid one that was all shares and more of a mix of bonds and shares as I read those where considered a bit safer.

90% of the time, that statement would be correct.   2022 has been in the 10% of the time you don't want to be in them.      Although we are getting closer to the point where they become attractive again.

However, the lower risk usually means lower long-term returns and less short term volatility.   

LAPORTS1

 A_T said:

Vanguard FTSE Global All Cap Index is probably what you want. But remember stock markets can crash.

Considering we're entering a recession, would the general consensus be to move funds out of the Vanguard FTSE Global All Cap Index to Lifestyle Strategy 80/20 or 60/40?

bostonerimus

My singular consensus (if that's possible) would be to have a portfolio that meets your financial strategy. As your strategy develops there might be a need to change allocation, but I would let your personal goals drive that not some macro economic numerology and guess work. As an example my retirement income is covered by a DB pension and rental income and my portfolio is 85% equities for long term growth. So through out this downturn I have not done anything. Even through a recession I will not touch my investments as they are invested for a 20 or even 30 year time horizon.

Albermarle

LAPORTS1 said:

 A_T said:

Vanguard FTSE Global All Cap Index is probably what you want. But remember stock markets can crash.

Considering we're entering a recession, would the general consensus be to move funds out of the Vanguard FTSE Global All Cap Index to Lifestyle Strategy 80/20 or 60/40?

The link between economic conditions and stock market performance includes quite a large delay factor.
The markets have known a recession is likely for some time, and it is already 'priced in ' To some extent the markets will already be looking for signs when the recession might be over .
A complicating factor is how widespread a recession might be . A UK one on its own would have minimal impact on global markets, whilst a US one , or maybe a Chinese property implosion would have more impact.

A_T

LAPORTS1 said:

 A_T said:

Vanguard FTSE Global All Cap Index is probably what you want. But remember stock markets can crash.

Considering we're entering a recession, would the general consensus be to move funds out of the Vanguard FTSE Global All Cap Index to Lifestyle Strategy 80/20 or 60/40?

Assuming the OP is investing in a pension that will not be touched 25 years then anything other than 100% equities for the first years is likely to miss out on growth. The risk and volatility can be reduced nearer to the time when the pension will be taken.