How are your pension pots doing

Prism

Cus said:

My main SIPP (which is managed by a wealth management firm) was down 12.7% after costs in 2022. Disappointing.

Are you in drawdown? Otherwise why disappointing?

dunstonh

Cus said:

My main SIPP (which is managed by a wealth management firm) was down 12.7% after costs in 2022. Disappointing.

How is that disappointing.   In a negative year, you get a negative return.   Some investors reported 30% losses (typically those on lifetstyling arrangements and very heavy in gilts.    Wealth preservation trusts have reported that 2022 was the worst in 100 years for them).  A 12.7% loss in a bad year is not disappointing. 

[Deleted User]

Well, lifestyle funds are different but  I would be a wee bit disappointed if anyone I paid money to manage investments held long duration bonds in 22.  Although the timing couldn’t be predicted, it was an asset which was going yo lose money. Having money in a losing asset needs to be explained. I’ve seen a few attempts by financial advisors to justify their failure to act for their clients by talking about how if you blend poor long-term bond returns with present and future short-term bonds returns, the blend isn’t too bad.  This is like tossing some sawdust into your soup.  The blend may be tolerable, but why include the sawdust?

MK62

Many people holding long duration bonds in 2022, are doing/did so in multi-asset funds (or in bond index funds) - it wasn't (and isn't) so easy for them to ditch those bonds without ditching the whole fund.......some of the most popular MA funds, such as VLS60, HSBC GS Balanced etc are all holding long duration bonds.........the alternative, ie a portfolio of numerous single sector funds, certainly isn't for everyone........some investors won't even be aware that they are holding such bonds anyway (they pay fund managers to worry about all that).

Dandytf

Small ex employees scheme.
Diversified Growth -9.68%
Equity - 8.59%
Though that's 2022, I've seen sunnier climates, No concerns.

H.L. very recent Sipp, off to very slow start, unlike prev' mentioned scheme, this Sipp is possibly far too early to expect some positive numbers.
-3.84%
Certainly includes some interesting choices such as Climate Change and Energy ETF +2 H.L. Managed funds. 

Almost forgot, DB Scheme, need new log in details. 

Prism

Deleted_User said:

Well, lifestyle funds are different but  I would be a wee bit disappointed if anyone I paid money to manage investments held long duration bonds in 22.  Although the timing couldn’t be predicted, it was an asset which was going yo lose money. Having money in a losing asset needs to be explained. I’ve seen a few attempts by financial advisors to justify their failure to act for their clients by talking about how if you blend poor long-term bond returns with present and future short-term bonds returns, the blend isn’t too bad.  This is like tossing some sawdust into your soup.  The blend may be tolerable, but why include the sawdust?

Its surprisingly difficult to access medium duration bonds in the UK. Most Gilt funds last year were around duration 12+. Many of the global passive funds include corporate bonds and are also slightly higher duration and risk. Euro and Dollar funds which cover a variety of bond durations are available but little for UK Gilts. Combining a short duration and longer duration fund seems to be the only realistic alternative.

Cus

Prism said:

Cus said:

My main SIPP (which is managed by a wealth management firm) was down 12.7% after costs in 2022. Disappointing.

Are you in drawdown? Otherwise why disappointing?

Not in drawdown. Disappointing as it was worse than the benchmark I use to judge their performance.

[Deleted User]

MK62 said:

Many people holding long duration bonds in 2022, are doing/did so in multi-asset funds (or in bond index funds) - it wasn't (and isn't) so easy for them to ditch those bonds without ditching the whole fund.......some of the most popular MA funds, such as VLS60, HSBC GS Balanced etc are all holding long duration bonds.........the alternative, ie a portfolio of numerous single sector funds, certainly isn't for everyone........some investors won't even be aware that they are holding such bonds anyway (they pay fund managers to worry about all that).

That’s absolutely fine if you are running a low cost “buy and forget” portfolio.  Like you say, these are passive funds not designed for fiddling, 


However if you are paying thousands every single year for “wealth management” and the advisor did nothing about a predictable loss then such investors should be asking questions right about now. 

[Deleted User]

Prism said:

Deleted_User said:

Well, lifestyle funds are different but  I would be a wee bit disappointed if anyone I paid money to manage investments held long duration bonds in 22.  Although the timing couldn’t be predicted, it was an asset which was going yo lose money. Having money in a losing asset needs to be explained. I’ve seen a few attempts by financial advisors to justify their failure to act for their clients by talking about how if you blend poor long-term bond returns with present and future short-term bonds returns, the blend isn’t too bad.  This is like tossing some sawdust into your soup.  The blend may be tolerable, but why include the sawdust?

Its surprisingly difficult to access medium duration bonds in the UK. Most Gilt funds last year were around duration 12+. Many of the global passive funds include corporate bonds and are also slightly higher duration and risk. Euro and Dollar funds which cover a variety of bond durations are available but little for UK Gilts. Combining a short duration and longer duration fund seems to be the only realistic alternative.

Prism said:

Deleted_User said:

Well, lifestyle funds are different but  I would be a wee bit disappointed if anyone I paid money to manage investments held long duration bonds in 22.  Although the timing couldn’t be predicted, it was an asset which was going yo lose money. Having money in a losing asset needs to be explained. I’ve seen a few attempts by financial advisors to justify their failure to act for their clients by talking about how if you blend poor long-term bond returns with present and future short-term bonds returns, the blend isn’t too bad.  This is like tossing some sawdust into your soup.  The blend may be tolerable, but why include the sawdust?

Its surprisingly difficult to access medium duration bonds in the UK. Most Gilt funds last year were around duration 12+. Many of the global passive funds include corporate bonds and are also slightly higher duration and risk. Euro and Dollar funds which cover a variety of bond durations are available but little for UK Gilts. Combining a short duration and longer duration fund seems to be the only realistic alternative.

Bond yields tell you exactly what average return you’ll get over the life of the bond.  This is true whether you own that bond on its own or blended into a fund. Inflation was never going to be zero over a 10 year duration.  Only the exact timing of losses was uncertain.  If a 10-year gilt yielded zero in 2021, then it was guaranteed to lose lots of money.  Many funds do not have either medium or long duration bonds. For example money market funds. Managed portfolios should have got rid of bonds after coupons got close to zero in 2020. 

Prism

Cus said:

Prism said:

Cus said:

My main SIPP (which is managed by a wealth management firm) was down 12.7% after costs in 2022. Disappointing.

Are you in drawdown? Otherwise why disappointing?

Not in drawdown. Disappointing as it was worse than the benchmark I use to judge their performance.

I wouldn't worry about benchmarks or comparing performance over a single year. I tend to look at 3 year performance as a minimum but not really likely to change things unless something changes within the investments that I don't like. Beside, while still contributing a few years of underperformance can actually be an advantage, if that is then followed by a period of outperformance.