Full Details of Fund holding and charges

Pat38493

Is there a web site or place I can go to find the full independent information about the funds my pensions are invested in?

For example my employer fund is currently 100% invested in "Aegon MI Savings (H)".

When I google the fund or look at the factsheet from Aegon, I don't seem to get the full overview of what is going on - for example there is no way to see the full list of holdings that the fund has - it either just shows as summary of % as in this case, or the "top x holdings".

Having started to read the book "Smarter Investing" - one of the key points was to completely understand the full details of what you are invested in and what the charges are.  However it's not clear how I get this information (and keep it updated as they change the fund)?

What's also not helpful (but I suspect deliberate) is that they always only give you the performance over 5 years, whereas the book says that 5 years is short term and doesn't matter, and I need to know the performance over 20 years (which probably impossible anyway as I suspect most of these funds haven't even been going 20 years).

Also, the charges is not totally clear either.  For example, if I just google the fund factsheet, it says the charges are 1.1%, but if I directly open the factsheet from the Retireready portal when logged in, the same factsheet says the charges are 0.22%.  I guess this is because my employer or their advisers negotiated a discount maybe?

Also (and maybe I just haven't reached this part of the book yet), how do I know if this fund is actively managed or "passive".  I guess it must be passive as the charges would be higher if it was active, but it does say in the description that they alter the fund based on current market conditions, which implies "active" to me?

Finally am I right in thinking this is not an "index" or "Tracker" fund - if I wanted to find tracker funds how would I search for those?  Is the word index or tracker normally in the headline description?  

Linton

The breakdown of the underlying funds (if this is your pension fund) is given in: https://markets.ft.com/data/funds/tearsheet/holdings?s=GB00B9M4B095:GBP

It is a fund of passive funds - ie the underlying investments are index trackers but the high level %s of those trackers is actively managed according to market conditions.

My guesses to the disparity in charges data: As it is a Pension fund the charges cannot directly be compared with normal investment funds - in particular the stated charges generally include the platform fees for which non pension funds would be charged explicitly.  Also as you suggest your employer or Retireready may well have negotiated lower fees since they may take over some of the admin work that would otherwise be done by Aegon.  I guess the 1.1% charges on the generic factsheet may apply if the fund was bought directly from Aegon.

The FT website has a "charts" tab which shows performance data going back to nearly 10 years ago when the fund was launched.

Pat38493

Linton said:

The breakdown of the underlying funds (if this is your pension fund) is given in: https://markets.ft.com/data/funds/tearsheet/holdings?s=GB00B9M4B095:GBP

It is a fund of passive funds - ie the underlying investments are index trackers but the high level %s of those trackers is actively managed according to market conditions.

My guesses to the disparity in charges data: As it is a Pension fund the charges cannot directly be compared with normal investment funds - in particular the stated charges generally include the platform fees for which non pension funds would be charged explicitly.  Also as you suggest your employer or Retireready may well have negotiated lower fees since they may take over some of the admin work that would otherwise be done by Aegon.  I guess the 1.1% charges on the generic factsheet may apply if the fund was bought directly from Aegon.

The FT website has a "charts" tab which shows performance data going back to nearly 10 years ago when the fund was launched.

Thanks @linton - however unless I'm missing something this only shows the top 10 holdings rather than all holdings.  Maybe that doesn't matter in a case like this where the top 10 holdings covers 95% of the fund, but that might not be the case in all funds?

Linton

Pat38493 said:

Linton said:

The breakdown of the underlying funds (if this is your pension fund) is given in: https://markets.ft.com/data/funds/tearsheet/holdings?s=GB00B9M4B095:GBP

It is a fund of passive funds - ie the underlying investments are index trackers but the high level %s of those trackers is actively managed according to market conditions.

My guesses to the disparity in charges data: As it is a Pension fund the charges cannot directly be compared with normal investment funds - in particular the stated charges generally include the platform fees for which non pension funds would be charged explicitly.  Also as you suggest your employer or Retireready may well have negotiated lower fees since they may take over some of the admin work that would otherwise be done by Aegon.  I guess the 1.1% charges on the generic factsheet may apply if the fund was bought directly from Aegon.

The FT website has a "charts" tab which shows performance data going back to nearly 10 years ago when the fund was launched.

Thanks @linton - however unless I'm missing something this only shows the top 10 holdings rather than all holdings.  Maybe that doesn't matter in a case like this where the top 10 holdings covers 95% of the fund, but that might not be the case in all funds?

Top 10 holdings are generally what is provided though in some cases you can get more details from the annual or quarterly reports.   However I cant find any for your fund.  But as you suggest the missing 5% should not make a significant difference to any conclusions you may come to.

Pat38493

Linton said:

Pat38493 said:

Linton said:

The breakdown of the underlying funds (if this is your pension fund) is given in: https://markets.ft.com/data/funds/tearsheet/holdings?s=GB00B9M4B095:GBP

It is a fund of passive funds - ie the underlying investments are index trackers but the high level %s of those trackers is actively managed according to market conditions.

My guesses to the disparity in charges data: As it is a Pension fund the charges cannot directly be compared with normal investment funds - in particular the stated charges generally include the platform fees for which non pension funds would be charged explicitly.  Also as you suggest your employer or Retireready may well have negotiated lower fees since they may take over some of the admin work that would otherwise be done by Aegon.  I guess the 1.1% charges on the generic factsheet may apply if the fund was bought directly from Aegon.

The FT website has a "charts" tab which shows performance data going back to nearly 10 years ago when the fund was launched.

Thanks @linton - however unless I'm missing something this only shows the top 10 holdings rather than all holdings.  Maybe that doesn't matter in a case like this where the top 10 holdings covers 95% of the fund, but that might not be the case in all funds?

Top 10 holdings are generally what is provided though in some cases you can get more details from the annual or quarterly reports.   However I cant find any for your fund.  But as you suggest the missing 5% should not make a significant difference to any conclusions you may come to.

True enough but if I then drill down to the first index fund holding on the list, the top 10 then only covers 23% of the fund.  This leaves me scratching my head a bit about the advice in the book to fully understand everything you are invested in, if the information isn’t available.  Never mind - maybe the answers lie in the rest of the book!

Linton

Pat38493 said:

Linton said:

Pat38493 said:

Linton said:

The breakdown of the underlying funds (if this is your pension fund) is given in: https://markets.ft.com/data/funds/tearsheet/holdings?s=GB00B9M4B095:GBP

It is a fund of passive funds - ie the underlying investments are index trackers but the high level %s of those trackers is actively managed according to market conditions.

My guesses to the disparity in charges data: As it is a Pension fund the charges cannot directly be compared with normal investment funds - in particular the stated charges generally include the platform fees for which non pension funds would be charged explicitly.  Also as you suggest your employer or Retireready may well have negotiated lower fees since they may take over some of the admin work that would otherwise be done by Aegon.  I guess the 1.1% charges on the generic factsheet may apply if the fund was bought directly from Aegon.

The FT website has a "charts" tab which shows performance data going back to nearly 10 years ago when the fund was launched.

Thanks @linton - however unless I'm missing something this only shows the top 10 holdings rather than all holdings.  Maybe that doesn't matter in a case like this where the top 10 holdings covers 95% of the fund, but that might not be the case in all funds?

Top 10 holdings are generally what is provided though in some cases you can get more details from the annual or quarterly reports.   However I cant find any for your fund.  But as you suggest the missing 5% should not make a significant difference to any conclusions you may come to.

True enough but if I then drill down to the first index fund holding on the list, the top 10 then only covers 23% of the fund.  This leaves me scratching my head a bit about the advice in the book to fully understand everything you are invested in, if the information isn’t available.  Never mind - maybe the answers lie in the rest of the book!

Understanding what you are invested in doesnt mean going down to the deepest level of detail - why stop at underlying funds/indexes and not go down to the individual companies?  What is important is the high level.  Rather than focusing on funds look at things at the industries and countries level.  There are other aspects, in particular value versus growth as represented at the extremes by large very solid and stable companies (Unilever perhaps) and a small loss making tech startup  that may or may not make the big time.  This sort of analysis is available from Morningstar and to a less satisfactory degree by Trustnet.

dunstonh

What's also not helpful (but I suspect deliberate) is that they always only give you the performance over 5 years, whereas the book says that 5 years is short term and doesn't matter, and I need to know the performance over 20 years (which probably impossible anyway as I suspect most of these funds haven't even been going 20 years).

It isn't deliberate.   Since launch, 10 year, 20 year or whatever is available.   However, there is only so much info you can give on a hard copy and only so much you can give online without generating extra costs.  

Also, the charges is not totally clear either.  For example, if I just google the fund factsheet, it says the charges are 1.1%, but if I directly open the factsheet from the Retireready portal when logged in, the same factsheet says the charges are 0.22%.  I guess this is because my employer or their advisers negotiated a discount maybe?

Fund factsheets show the maximum possible and do not include discounts that exist on certain contracts.    That fund is available on multiple contract types. The 1% version would likely be on contracts where the pricing is bundled or before 2013.

Also (and maybe I just haven't reached this part of the book yet), how do I know if this fund is actively managed or "passive".  I guess it must be passive as the charges would be higher if it was active, but it does say in the description that they alter the fund based on current market conditions, which implies "active" to me?

A multi-asset fund is not a tracker fund.   So, by default, it will be managed.  Even if the underlying assets are passive.

Pat38493

OK then but out of interest - do IFAs have access to the full breakdown of 100% of each fund or is this somehow kept confidential by the fund management company?

My comment about the funds only having 5 years of history was probably a bit cynical - the point being that it might be in the interest of the fund management industry generally to keep creating new flashy funds and then advertising the ones which happen to do really well over the most recent few years.  Unless you are in the know, who wants to buy an “old” fund that’s been running 40 years?  Also it might become apparent that over several decades they are all performing roughly the same net of charges  

Linton

Pat38493 said:

OK then but out of interest - do IFAs have access to the full breakdown of 100% of each fund or is this somehow kept confidential by the fund management company?

My comment about the funds only having 5 years of history was probably a bit cynical - the point being that it might be in the interest of the fund management industry generally to keep creating new flashy funds and then advertising the ones which happen to do really well over the most recent few years.  Unless you are in the know, who wants to buy an “old” fund that’s been running 40 years?  Also it might become apparent that over several decades they are all performing roughly the same net of charges  

Data back to the 1990s is readily available from Trustnet/charting (or now Trustnet/portfolio/tools/charting I think)..  Obviously that depends on whether the fund is that old, which most aren't.

Funds dont wear out.  There are a few funds that have been steadily doing their job for decades.  Though most funds postdate the large increase in investing since online trading became miainstream in the 2000's.  Another factor is that few fund managers have been around for decades.  There has been a lot of mergers in the industry with resultant loss of funds through rationalisation and many new players that werent around 20 years ago.

WIth trustnet you can check that funds do perform the same net of charges - my playing with the data showed no great evidence of that. Index funds for example seem to keep around the midpoint over extended periods rather than rising to the top though the data is limited since index funds are a relatively recent innovation.

dunstonh

OK then but out of interest - do IFAs have access to the full breakdown of 100% of each fund or is this somehow kept confidential by the fund management company?

IFAs will typically use commercial versions of the free software.   These go into more detail and cover most fund universes and data since launch.    Only limiting factor is if the fund house/provider doesn't submit data (which is rare) or the funds are bespoke (also rare but happens with some older occupational pensions).  

JohnWinder

‘whereas the book says that 5 years is short term and doesn't matter, and I need to know the performance over 20 years ’

Nice work getting into Hale’s book and digging into your funds.

I’m still developing my own thoughts on how useful past performance information is, but clearly longer term results ought to be more reliable than short term ones in view of the gyrations in market prices and returns. But the future isn’t always just like the past, however reliable the measure of the past is.

We all know government bond returns are lower than stock returns, so >20 years of stock vs bond returns should give a clear idea of how different they are, except that the recent 22 years had a difference of 2%/year while the previous 22 years has a difference of 6%/year. Past returns will confirm your belief that stocks do better than bonds long term, but the past isn’t super reliable even for a fundamental matter like government bonds which are much less risky than stocks and shouldn’t but did come close to having similar returns over a long-ish period.

But I think active fund managers’ performances compared to a relevant index over a period of Hale’s 20+ years are more unreliable as an indicator of the next 20 years. Hale (p62, 3rd edition) quotes from a UK FSA report: ‘(we) have failed to find evidence that information on past performance can be used to good effect by retail investors in choosing funds….(in general) investment performance does not persist….USA are similar.’ 

Long term data enriches your historical perspective, or challenges your beliefs, or hints at a future, but I don’t see how they can be useful in choosing one fund over another except perhaps to see how big the tracking error has been or how much the fund charges have been lowered (or raised!).           

So if Hale is suggesting we make use of return data >20 years old, can you tell us what he actually wrote in the book or elsewhere.

If you want to invest in stocks, there’s a choice between active or tracker. The performance of the tracker, long or short term, is irrelevant since it will give market returns (or close enough). So we only need to consider the performance of the active funds.

There are some active fund managers who outperform the market for a few years, maybe half of them some by luck and some by skill; it’s hard for outsiders to know. Go another few years, and because there’s not much persistence of performance, the better ones become the less good or underperform the market and vice versa. By 20 years not many are still outperforming, a few percent only. Is it skill or luck? The folk at ifa.com try to answer that with a t test, beyond me, and they say you need many decades of above market returns (unless they’re hugely above market returns) to conclude with confidence it’s skill not luck.

There are 4000 funds in UK, more than half will be active but lets say it’s 2000, and let’s say only 500 teams or individuals decide how those 2000 funds invest. So, each team manages 4 funds; it’s more like 2 or 1, but you can redo the maths at the end. For now, 500 active managers/teams.

It’s only luck that allows you to toss an unbiased coin 3 times and get three heads, and there’s a 1 in 8 chance getting 3 heads: .5x.5x.5.  In a room of 512 people, each tossing a coin 9 times, you’d expect 1 person to get 9 heads in a row just by chance; if you got one you wouldn’t attribute it to skill in coin tossing. If one of 500 UK active fund teams outperforms the market for 9 years in a row, would you conclude it’s skill or luck? It certainly doesn’t have to be skill if fund manager performance has the right distribution. So how much does it help to know the long term performance of an active manager? The Financial Services Authority couldn’t find that it helped us at all. That’s where I’m leaning.