NEST Pension Performance

dunstonh

My Aviva pension used to be good but has gone off a cliff and the AMC is quite high.

The Aviva pension doesn't perform. It is neither good or bad in that respect. Its the fund(s) you hold in the pension that matter.  Not the logo in the corner.

UK Equity has been off the boil since Brexit (and arguably since 2008 when yield went out of fashion and the markets turned to growth. 2022 saw a return to value but it was short lived).

 Any suggestions where to move it for middle risk or should I give it more time?

Going 100% into UK equity is bad investing.   Most people's portfolios will have between 4-25% allocated to UK equity depending on their risk profile.
Is there a reason you want to reduce the investment risk to middle?

 It has been in decline relative to others in this sector for over 5 years though, last year most dramatically.

Not according to your figures it hasn't.  It outperformed sector average over 1, 3 & 5 years.

To be honest, I don't know how you can refer to a 5 year return of 41% as going off a cliff.     Most would be very happy with that when you consider the last 5 years.

DavidAC

I also have Aviva Aviva Pension Managed AP Fund factsheet | Trustnet. About 2/3 is in the UK equity and 1/3 in this one. It is an old pension that I have had for over 25 years. It used to be Sun Life, then Friends, then finally Aviva. I have not made any significant contributions to it for over 10 years because the company I was with was taken over and changed new contributions to their scheme Stan Life Sustainable Multi Asset (PP) Pn S4 Fund factsheet | Trustnet. I then changed jobs about 5 years ago and the company pays into NEST. Getting fairly near to retirement (I am 58) I have been putting over half my salary into the SL one for the last 3 years, the AMC is discounted to 0.55%. I paid into SL instead of NEST because of the NEST 1.8% contribution charge, but then I saw it is waived for transfers, hence the interest in transferring Aviva into it.

MallyGirl

The Aviva managed fund you mention would count as a more 'middle risk'. Whether there was advice back at the beginning to go heavy in UK equities, or whether it was your choice, you could do a lot worse than just switching all the Aviva holdings into just that one. The SL is lower in equities that the Aviva one which can be interpreted as lower risk by some.

DavidAC

Thank you MallyGirl. My thinking at the time (if I remember correctly 25+ years ago) was to put most of it in the UK, so I chose 2/3 in the UK fund and 1/3 in the managed AP fund. The UK fund hasn't done badly, until recently (better than middle ranking 1 year ago, now ranked 721 out of 809).

I was just comparing the two Aviva funds and thinking the same as I think you suggest, moving the Aviva UK Equity AP to the Aviva Managed AP. The SL is a bit heavy for my liking on North America, 41%, to move it all there (and nearly all eggs in one basket). Aviva Managed is North America 23% UK 19% and Europe 14.8% seems better balanced.


BUT the fund factsheet fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=packet_lp_fund_unit_doc_factsheet&docid=2dfbbce5-16cf-45d9-9b55-2520826865a6&user=DOYH2RRYUfFhRy9gQ2%2bjULk97bgNw2CIbSv%2flGgZpaI%3d&language=en-GB&track1=2fP2a8mBpcIKF4acsDnLVvjVFOlK2wnDB7uLltWovmLK53P9n0tBqUlczghhw9YspScdiOE9h3xUYthZ7tWPqA%3d%3d&track2=&r=1.

less than 15% in 5 years, very different numbers to Trustnet again. Nest last published 5% annualised in last 5 years. Compare NEST retirement 2040 and Aviva managed on Trustnet (so same date range), NEST is better again.

MallyGirl

Past performance is no guarantee of future performance. Nest retirement date funds use lifestyling and that would be a no for me, but I am not you

DavidAC

I know past performance is no guarantee, but other than selecting the types of investments what else can you go on. I know my Aviva UK Equity has nosedived in performance even relative to the sector it is in.

Shortly after the recent stock market sharp dip Standard Life informed me they were going to start moving my funds into a pre retirement fund. I told them not too because it would have consolidated the losses. Very glad they did not move it. If they had it would have been just before the bond crash so I would have got the worst of both. They have told me they will now not move it to pre retirement until I tell them to do so.

With hindsight it seems stupid for low risk funds to have been in bonds paying very low returns which made them vulnerable to high inflation, as we have had. Bonds have better returns now though, so shifting into them pre retirement might not be so bad. I am in the NEST 2032 fund with my current employer. According to their chart it is just starting to shift into bonds. Only have about 1/20th of my total pension with them.

QrizB

DavidAC said:

I know past performance is no guarantee, but other than selecting the types of investments what else can you go on. I know my Aviva UK Equity has nosedived in performance even relative to the sector it is in.

That is not what the Trustnet data shows, though.

Your Aviva UK Equity is up in every quoted period and has performed better than the sector over 1, 3 and 5 years.

What exactly makes you say that it has "gone off a cliff" or "nosedived" when the data says otherwise?

DavidAC

I guess it is just the last few months with the ranking dropping to near the bottom. I found on Trustnet the Explore now allows you to set date ranges. Setting to the same ranges as the fund factsheet gives nearly the same results. Just a few days difference in date can make a big difference in return. Maybe I should only look at the returns over the longer date periods. Thank you.

dunstonh

DavidAC said:

I guess it is just the last few months with the ranking dropping to near the bottom. I found on Trustnet the Explore now allows you to set date ranges. Setting to the same ranges as the fund factsheet gives nearly the same results. Just a few days difference in date can make a big difference in return. Maybe I should only look at the returns over the longer date periods. Thank you.

And do not forget that a sector can contain funds with different investment strategies.  And at different times, those strategies will be in favour or out of favour.    So, a fund that is top quartile currently could be bottom quartile the next.  That doesn't make it a good/bad fund.   It just means its investment style was or was not in favour in that period.

In the case of UK all companies, you have funds that could be heavy in large cap, mid-cap or small cap.  Along with all share or those that focus on UK equity income or focus growth stocks or value stocks.  At different points of the economic cycle, they will all have their turn at being best or worst.        If you chase past performance as a guide to future returns, you could well be going into a fund that has done well during a period that suited it but is about to enter a period that doesn't suit it. 

ET22

Hi, I already have a small pension with Aviva which i am planning to invest a significant amount of money into over 15 years. Am i right in thinking it doesnt really matter too much about the risks in the short term as  it would usually "even out" over what would be a 15 year period?