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Aviva Pension Index Fund Changes - ESG Applied



Has anyone else had this and found a way to keep standard index tracking funds?
Comments
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I've not seen anything about Aviva doing this. Is this an employer pension or a personal one? I'm wondering if it's something your employer has kicked off?0
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We don't have any index tracker funds, but I'm interested if this will become a wider stance across investment houses.
Will this ESG issue spread to funds? Or has it already?How's it going, AKA, Nutwatch? - 12 month spends to date = 2.98% of current retirement "pot" (as at end April 2025)1 -
I have seen some workplace pensions go down this route. i.e. pushing their beliefs (or that of the pension provider they use) onto the investors.
Blackrock moved towards ESG with a number of their existing trackers and some new ones. Blackrock are often the fund house behind the scenes.
With an individual pension, you have all the choice you want (either on your plan or moving it to a plan that does have what you want). With your current workplace pension, you are largely stuffed if they don't offer non ESG versions.Will this ESG issue spread to funds? Or has it already?It depends on how strong the minority groups are and how weak the management are.
Some companies are already saying they are feeling the pain from some fund houses forcing ESG on investors.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.3 -
jim1999 said:I've not seen anything about Aviva doing this. Is this an employer pension or a personal one? I'm wondering if it's something your employer has kicked off?Remember the saying: if it looks too good to be true it almost certainly is.0
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jimjames said:jim1999 said:I've not seen anything about Aviva doing this. Is this an employer pension or a personal one? I'm wondering if it's something your employer has kicked off?
I'd be inclined to message them and ask if it's possible to make partial transfers out. I know at least some Aviva schemes offer this, i.e. so long as you don't transfer all of the assets, the pension remains open and your employer can continue to put your contributions in.
You could then move a portion over to a SIPP provider like Fidelity and invest in whatever you liked there.0 -
I had the same letter late last week. I'm holding one of the affected index funds in my workplace pension.
I hold 40% in the Aviva MyM Blackrock US Equity Index Tracker fund which tracks the FTSE USA Index. It seems from the information in the letter that a custom index will be created omitting companies that trade coal, weapons and tobacco. There will be a one off charge on 0.04% for this, which for me will be £50 or so.
It's not clear if FTSE Russell, Blackrock or Aviva themselves will be creating the custom index and there are no details of the companies that are being excluded.
I have pondered this as you can switch out to other funds, in the Fund Supermarket you can select other index funds such as Vanguards US Equity Index among many others but the annual fees are a bit higher that using the selection of Aviva Blackrock index funds, which I can get for 0.16% AMC per year.
It seems like an Aviva boardroom ethics decision being forced on customers. Rather than creating new index funds and giving people a choice to switch to a more ESG friendly index they are forcing their ESG views on all affected index holding customers and charging them for the privilege.
I also hold the Aviva MyM HSBC Islamic Global Equity Index which tracks the Dow Jones Islamic Global Titans, which are the 100 top market cap companies that comply with Shariah investing principles, effectively similar ESG principles so is already excluding alcohol, drugs, weapons. Performance is quite similar to the US Equity Index but tends to be a bit more growth tilting compared to the US Equity Index which will have the more value oriented sectors catered for in a higher proportion as the S&P500 does.
I'm not really fussed about the £50 charge as such, more niggled by the principle of having something forced on me, but, I will probably just let it ride as I selected these index funds for a reason and want to continue to hold them in the proportions I do now.
More interesting will be to see how the affected index funds perform over the next decade with the "rogue" companies filtered out. Without knowing who the companies are it will be hard to make any kind of assessment, if one or more these companies are in the Top 10 holdings of these index funds then it could have quite an impact over time.
As far as I can tell none of the Top 10 US companies trade coal, tobacco or weapons. No.12 on the market cap weight is Exxon Mobile at 1.2% of the S&P500 but I think they ditched their coal assets many years ago?? As you go down the list the weightings drop off and so there could be negligible impact.
Not sure what companies are affected in the other indexes such as the UK where the impact could me more notable
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Found this - Aviva have surveyed employers and suggest that 80% of employers want pensions funds to be ESG compliant. I guess this may have contributed to this change.
80% of employers think it is important pensions are invested responsibly - Aviva plcMaiyuresh Rajah, head of investment strategy and propositions at Aviva, said: “It could be that employees and employers either consider return on investment more important than having funds invested responsibly, or that they see them as mutually exclusive in that ‘you cannot have both’.
“ESG factors are material sources of both managing investment risk and out-performance opportunities for customers. We believe integration and alignment of ESG throughout investment solutions is essential and, over the long-term, will lead to superior investment returns.
Well he seems to own a crystal ball as well. It hope it was sustainably manufactured.
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I would be checking with my employer if they are driving this, and if they are, then claim the 0.04% back from them, otherwise if initiated by Aviva, I would be discussing with them the charge on changes being initiated by them.Living in supposedly sunny Kent
14*285 JA Solar Percium Panels
Solis 4kw inverter
ESE facing with a 40 degree slope1 -
jimjames said:jim1999 said:I've not seen anything about Aviva doing this. Is this an employer pension or a personal one? I'm wondering if it's something your employer has kicked off?1
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"Aviva have surveyed employers and suggest that 80% of employers want pensions funds to be ESG compliant."
Probably because the boards of those companies also need to be seen to be compliant...so they themselves can't be accused of being "bad".
Is ESG a worldwide "thing"? Who's behind it?How's it going, AKA, Nutwatch? - 12 month spends to date = 2.98% of current retirement "pot" (as at end April 2025)1
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