Royal London Pension Options

Tonski

I'm looking to move what my pension is invested in for my Royal London, workplace pension. Currently, it is invested in governed portfolio 4, which is made up of 70% equities (RLP Global Managed). 

Governed portfolio 4 - strategyfactsheet.asp (royallondon.com)

RLP Global Managed - Royal London RLP Global Managed (GBP) (fundslibrary.co.uk)

This "RLP Global managed" has a large overweighting to the UK (25% vs ~4% typical) which I'm not a fan of. This looks pretty similar to the Vanguard lifestrateries. I can see from the factsheet that the fund is made up of many other funds with the main holdings being "RPL American Tilt" and "RPL UK Equity" and these funds are made up of many companies. Does anyone know how or where I can see the breakdown for "RLP Global managed" in terms of %holdings for individual companies, e.g. the overall % held in Apple, Shell, Microsoft etc? I could do this manually by going into all the funds and adjusting for their weight, but this would take quite a while and strangely on the fact sheet, it says that the top 10 holding make up 118% of the fund so not sure what is going on there?

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London? If so, how easy was this to do? Some of these funds have very high fees so I will need to selective here. The governed portfolios have a fund charge of 1% which is high, but my company gets a discount down to 0.3% which seems decent. I will check with Royal London to make sure I still get the discount if I change funds.

In terms of the new fund, I would like to select a globally diverse index fund, something similar to the Vanguard FTSE Global All Cap fund but obviously I need to select from Royal London's fund range. The only one that I can see that looks similar is "RPL Worldwide" and this has the same fees as "RPL Global Managed". Are there any other funds that I may have missed or are worth considering?

FTSE Global All Cap Index Fund - Accumulation (vanguardinvestor.co.uk)

Royal London RLP Worldwide (GBP) (fundslibrary.co.uk)

If I move funds, how would this be done? Will I hold my stocks and bonds that I have bought for the last 4 years from portfolio 4, or will I have to sell everything and then reinvest the cash in my newly chosen fund?

For Information I'm 39 and plan to retire ~65 and have been in the pension for ~4 years to date. I pay in 15% to my pension and my employer contributes 10%.

dunstonh

This "RLP Global managed" has a large overweighting to the UK (25% vs ~4% typical) which I'm not a fan of.

With the GP range, RL allow you to swap out the global managed fund for one of the other global equity funds that they offer.  There are about 5 including some trackers.

 Does anyone know how or where I can see the breakdown for "RLP Global managed" in terms of %holdings for individual companies, e.g. the overall % held in Apple, Shell, Microsoft etc? 

it shows on analytics.  So, some of it may be on trustnet (the cut down version of analytics).  Probably only the top 10 on there though.

and strangely on the fact sheet, it says that the top 10 holding make up 118% of the fund so not sure what is going on there?

if the snapshot happens to be taken on a day of trades and settlement has yet to occur, then its not uncommon for that to happen.

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London?

Not done it very much with anyone as its rare to have someone with that high level of risk tolerance but its very easy to do with RL.

Some of these funds have very high fees so I will need to selective here. The governed portfolios have a fund charge of 1% which is high, but my company gets a discount down to 0.3% which seems decent. 

The default charge is 1% and is a legacy of the old stakeholder pension.   However, virtually no-one is on 1% due to the fund based discounts that most RL contracts have.   The discounts apply to all funds.

I would be wary of playing around with the funds too much.  RL do a pretty good job (beating VLS on like for like basis).   If you want 100% equities then the global trackers can be used.

If I move funds, how would this be done? Will I hold my stocks and bonds that I have bought for the last 4 years from portfolio 4, or will I have to sell everything and then reinvest the cash in my newly chosen fund?

You just switch out of what you no longer want into whatever you want.

Albermarle

This "RLP Global managed" has a large overweighting to the UK (25% vs ~4% typical) which I'm not a fan of.

4% is the approx UK % of global financial markets and this is the % used in most global index tracker funds.

However typically if you looked at the wider sphere of investing and pension funds, then typically the % is a lot higher. Quite often a lot higher than 25%.

There are a lot of different opinions on what the level should be. Also if you do not have a 100% equity portfolio ( and most do not) then a UK bias on the fixed interest side is seen as probably a good thing.

Rich1976

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London?

Not done it very much with anyone as its rare to have someone with that high level of risk tolerance but its very easy to do with RL.

Is it that rare though for someone not wanting to invest 100% in equities? Whilst that is above my risk tolerance these days and not something I do personally the amount of free information with YouTube videos and Reddit posts suggests this is what’s being ‘recommended’ and of course people think that’s what they need to be in. Vanguard Global All Cap being the one mentioned above anything else. Quite concerning really .

Albermarle

Rich1976 said:

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London?

Not done it very much with anyone as its rare to have someone with that high level of risk tolerance but its very easy to do with RL.

Is it that rare though for someone not wanting to invest 100% in equities? Whilst that is above my risk tolerance these days and not something I do personally the amount of free information with YouTube videos and Reddit posts suggests this is what’s being ‘recommended’ and of course people think that’s what they need to be in. Vanguard Global All Cap being the one mentioned above anything else. Quite concerning really .

The logic for a younger person is to invest 100% equities, but the unknown is how stressed you will be in a market crash. Plus the majority of people are quite risk averse, even younger people. Plus most people are invested via their pension with I think > 95% in the default fund which is never 100% equities.

dunstonh

Rich1976 said:

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London?

Not done it very much with anyone as its rare to have someone with that high level of risk tolerance but its very easy to do with RL.

Is it that rare though for someone not wanting to invest 100% in equities? Whilst that is above my risk tolerance these days and not something I do personally the amount of free information with YouTube videos and Reddit posts suggests this is what’s being ‘recommended’ and of course people think that’s what they need to be in. Vanguard Global All Cap being the one mentioned above anything else. Quite concerning really .

Putting aside that Vanguard is recommended by many youtubers as they are fanboys of Vanguard....  (and again, for clarity, I am not being negative of VG as have some VG funds in my portfolio.  I am being negative of the vids or articles that pray and the church of VG and nothing else).

In the past it was more common to be higher in equities.  Nowadays it is less common.  Largely due to the EU directive MiFIDII and the increased visibility with online valuations or apps.

in the [not so] old days, you got an annual paper statement.   That effectively smoothed out most negative periods or even hid them altogether.      Nowadays, people log in to see their values daily (asking for trouble) or even those that just see the quarterly statements. They see the peaks and troughs like they never saw before.      100% equities in mainstream means you are going to be seeing a 50% loss or thereabouts.    Not many people can handle seeing £250,000 become £125,000.

You also need to be aware of the less common 80% loss periods.   Most timescales that people invest will miss that one but you may not be ask lucky.      So, you need remember capacity for loss.

So, if you had no such thing as investor behaviour and no such thing as capacity for loss, then timescale does suggest a higher equity ratio. 

Somebody

Tonski said:

Ideally, I would like to be invested in 100% equities so I'm considering coming out of the Lifestyle funds and picking my own funds. Has anyone done this with Royal London? If so, how easy was this to do?

I’ve done this.  I moved all funds to RLP Adventurous Managed.  Very easy to do if you have access to your account online. You should be able to keep the existing charging structure negotiated by your employer.

Good luck. 

Pat38493

dunstonh said:

You also need to be aware of the less common 80% loss periods.   Most timescales that people invest will miss that one but you may not be ask lucky.      So, you need remember capacity for loss.

When has this happened then, and how quickly did it recover?  Also - do you man 80% net loss including inflation or some kind of currency revaluation in that country, or 80% just investment loss?

dunstonh

Pat38493 said:

dunstonh said:

You also need to be aware of the less common 80% loss periods.   Most timescales that people invest will miss that one but you may not be ask lucky.      So, you need remember capacity for loss.

When has this happened then, and how quickly did it recover?  Also - do you man 80% net loss including inflation or some kind of currency revaluation in that country, or 80% just investment loss?

One of the most recognised was Sept 1929 to Summer 1932  saw the Dow fall 89%.   Without inflation adjustment.  The Dow didnt return to that level again until 1954

The Great depression was deflationary

Qyburn

How did bonds do over that period? 

Ivkoto

dunstonh said:

Pat38493 said:

dunstonh said:

You also need to be aware of the less common 80% loss periods.   Most timescales that people invest will miss that one but you may not be ask lucky.      So, you need remember capacity for loss.

When has this happened then, and how quickly did it recover?  Also - do you man 80% net loss including inflation or some kind of currency revaluation in that country, or 80% just investment loss?

One of the most recognised was Sept 1929 to Summer 1932  saw the Dow fall 89%.   Without inflation adjustment.  The Dow didnt return to that level again until 1954

The Great depression was deflationary

Does it make any difference, that population around the world at 1930 have been 2bn and now is 8bn ?
Also what is the number of people invested at that time and now?