L&G funds for work pension

safe_hands2

Hi all. I started a new job this year that uses legal and general platform for funds. The default fund I was given was PMC multi asset 3. From looking at the fund, it seems a poor choice. Equity proportion is down at about 35 % and performance over last 5 years hasn't been great (I know, I know, don't look at past performance 😄, but compared to my balanced SIPP/ISA funds, it hasn't done well.

I've had a look and the PMC consensus seems like a good alternative. Still multi asset but with equities at about 70%. I won't be accessing the pension for at least 12 years.

If there were the usual legal and general funds available that I see in fidelity then I'd find it quite easy to choose, but the funds seem to be different.

Does the consensus sound ok? Anyone have this or similar experience? Am I missing any considerations?

gm0

I would agree that L&G multi-asset 3 is very low risk (too cautious) fund for the very long term in accumulation.  Some people will like it but many including me would want (a lot) more equities.  In my view it is (in theory) solving a problem you don't have - in that you are not accessing the investment for a long time.  Until retirement.

It's recent performance is indeed poor mostly down to the 2022 bonds/interest rate reversal and rapid climb.  See also VLS20 VLS40 etc.  Lots of bonds = had a torrid time. Over the long haul if markets behave somewhat historically then the real returns of the various asset classes will emerge and it will underperform richer mixes of global equities (due to the large fixed income component) but the volatility will ultimately be demonstrably lower as well vs comparators.  Relevant to some - probably not you.
It is not optimised for maximum cumulative growth long term.  It is optimised for reduced volatilty and "sufficient" return.  Different objective.

I do use some of it in deaccumulation - a slice - albeit a bit experimentally as a way of adding some bonds to an L&G portfolio.
On the fixed income / diversification side it has some interesting bits and the price I get for it is OK.  I am evaluating returns vs volatility in context my overall portfolio. But it is absolutely not my core holding.

As to Consensus.  I don't use that one but from a quick scan of the factsheet @70% that's a bit better on equities.
But with a scheme L&G selection - in accumulation I just used the cheapest and simplest passive equities choice available @ 100% equities (in very long term accumulation - age range 25-50+). 

In the L&G range there are L&G pure equity trackers at 0.12% charge or so.  World ex UK, UK.  (mix to home market bias taste or 4%) gives a simple passive global developed holding.    *If* these are offered which they sometimes are not in older occupationals. World ex can be missing even if the UK FTSE All Share tracker is there.

There is also an L&G pension scheme ESG offering that shows up but the price may or may not be keen in your scheme - Global Ethical. Have seen as low as 0.06% and as retail fund at 0.3%  Tracks global developed equities FTSE4Good Developed - so 100% global developed equities with a few knockouts for the ethical part - it isn't especially ethical and doesn't deviate a huge amount from the full index).  At the low end of the charges it's not a terrible way to go global passive.  The main objections are either the active stance of ethical knockouts.  And the short(er) list of stocks on the tail of small holdings - ~1500 vs ~6000 or so for the largest passives. 

safe_hands2

Thanks for the detailed reply. I'm 50+ and want to avoid all equities in this pension. But 70% seems appropriate for the timescale and my risk appetite. Sounds like I haven't missed anything obvious. Thanks again.