High negative investment returns after charges.

[Deleted User]

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

eskbanker

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

The money had all been invested by a year ago:

MattMontreal said:

at my last job, which I left a year ago, I contributed about £6k to a Fidelity pension

p00hsticks

MattMontreal said:

Hi all,

I'm new to pensions and at my last job, which I left a year ago, I contributed about £6k to a Fidelity pension. Recently I received a statement saying that I have about £5.4k left in my pension after "Investment returns after charges".

This amount - 10% - seems like a crazy amount to lose after a year, but is there something I'm missing about how these things work? Is that a normal amount?

Matthew

What was the total sum of the pension ? (i.e.did you personally contribute £6k and ther was more from your employer or does that include the contributions your employer made ?)

Cus

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

dunstonh

As a general guide, around 1 in 5 years are negative.   That doesnt mean every 5 years will be a negative year.  you could have two negative years in a row and 8 years to the next one.   

2022 is going to end a negative year.  2018 was negative, as was 2008, 2002, 2001 and 2000.    They are just something that happens and is all quite normal.   Indeed, those paying in monthly need these negative years to make the most money.   So, they shouldnt be viewed as a bad thing.

[Deleted User]

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

MX5huggy

100% equity, is unlikely for someone who’s just used their employer’s default pension. 

Cus

Deleted_User said:

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

I'm confused on the GBP part.  Looking at the Vanguard FTSE All World  UCITS ETF GBP is down 6.5%. Surely most UK based investors would buy the standard etf like this, rather than search for a non currency hedged fund? I mean if you are in the UK, then why put additional currency risk to your investment?

[Deleted User]

Cus said:

Deleted_User said:

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

I'm confused on the GBP part.  Looking at the Vanguard FTSE All World  UCITS ETF GBP is down 6.5%. Surely most UK based investors would buy the standard etf like this, rather than search for a non currency hedged fund? I mean if you are in the UK, then why put additional currency risk to your investment?

You are buying actual assets.  Currency is irrelevant.  Hedging is bad when investing in stocks over long term.  You are imposing additional costs while also increasing volatility and reducing long term expected return, all at the same time.  There is an argument that hedging has advantages when buying foreign bonds. 

Prism

Cus said:

Deleted_User said:

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

I'm confused on the GBP part.  Looking at the Vanguard FTSE All World  UCITS ETF GBP is down 6.5%. Surely most UK based investors would buy the standard etf like this, rather than search for a non currency hedged fund? I mean if you are in the UK, then why put additional currency risk to your investment?

The standard ETFs and funds are not currency hedged and you would expect them to move with changes in GBP. Hedging costs additional money and unless the goal is to absolutely reduce volatility then its generally just a drag on performance. Vanguard UK do hedge their global bond funds to GBP as an example of this.