Aviva Long Gilt S^ fund

dunstonh

tichtich said:

dunstonh said:

I don't disagree with you when making a management decision.   That is the thing about making active decisions.    Aviva cannot do that, though (or any provider, as it's not Aviva-specific).

Thanks for enlightening me about what lifestyle funds can and can't do. Do you think it's a problem that millions of people have their pension pots in funds that arguably don't have the flexibility to adapt to extreme circumstances, such as near-zero interest rates?

The pensions offer alternatives for people or their advisers to choose.  However, it is very difficult to get people to engage sometimes.   Even if the provider writes to them, they probably find only a few percent may respond.

I'm looking forward after reflecting on an era that has recently past. There was always going to be a phase 2 of post GFC policy. Just a lot later than was envisaged. 

I remember the articles from 2012ish that said it was going to happen then.   I also remember seeing economists and market "gurus" saying that gilts have never had a better time to buy in July 2022.

Its easy to look back but its impossible to look forward.

 I don't see any viable conditions where annuities supersede drawdowns again. Very wealthy people might opt for, (or be advised to) opt for an annuity as part of an overall retirement portfolio. However the amount of people that would purchase an annuity with the majority of their pension fund will now always remain small, since far more flexible options are on the table.  

the problem with drawdown stats is that the figures include small pots and small value UFPLS which would not be suitable for annuity, even with much better rates.     Strip those out if annuity rates continue to exceed 7% and markets suffer a poor decade, then you never know.  Especially if markets have a 1 in 100 year event similar to what gilts have just gone through.

Hoenir

dunstonh said:

I remember the articles from 2012ish that said it was going to happen then.   I also remember seeing economists and market "gurus" saying that gilts have never had a better time to buy in July 2022.

Its easy to look back but its impossible to look forward.

The broad direction of travel can be traced back to a series of G20 summit meetings in 2010. Where there was broad consensus agreement on how the global liquidity crisis caused by the GFC should be managed. Phase 1 was to allow the banks to deleverage their balance sheets and meet the requirements of the incoming Basle III banking regulations (still not fully implemented even now). Phase 2 was then for Central Balance sheets to be progressively unwound independently. There was never any expectation of any quick fixes or that the exit from the policies would be straightforward. Always going to be a multi decade challenge. Due to the sums involved. A return to a pre2007 level of interest rates and trading volatility wouldn't be out of place. The punch bowl of cheap liquidity that investors got drunk on is being drained away slowly. Though Biden doesn't seem to be reading the script and causing ruffled feathers. As one European finance minister has said. "The Inflation Reduction Act" does exactly the opposite of what it's title suggests that it does.