Pension performance

Cus

The OP asked for a sense check of the performance of their aggressive pension. @Rattusnorvegicus identified that a Nasdaq index tracker fund has performed much better than OP. I would call a pension that had only one fund invested in the Nasdaq tracker as more than just aggressive.  So perhaps a little showing off but also a good marker for comparison 

Bostonerimus1

Cus said:

The OP asked for a sense check of the performance of their aggressive pension. @Rattusnorvegicus identified that a Nasdaq index tracker fund has performed much better than OP. I would call a pension that had only one fund invested in the Nasdaq tracker as more than just aggressive.  So perhaps a little showing off but also a good marker for comparison 

Without knowing the composition of the OP's pension investments comparisons are going to be somewhat meaningless. 

Linton

Rattusnorvegicus said:

Hoenir said:

Rattusnorvegicus said:

kinger101 said:

I don't see how advocating high risk strategies answers the OP's question.  It rather just looks like showing off.

 Its well known that long term pension holding (30+years), mitigate some of that risk, as the ETF has time ro recover.from any financial crash barring any fundamental shift in the market.

More recently there's been posting of long term charts to support the buying of certain markets now. Dig beneath the surface. Soon becomes apparent there's no proper understanding of "why" .  Hindsight investing has no predictive powers. 

I entirely agree. My models are based on the future drawdown date of my pension, the inability of the us population to unionise, us population growth, us economic cycles, and many other us-based factors going forwards.

I'm just an advocate for financial knowledge, an understanding of risk vs reward, and a considered evaluation based approach to investing, so if someone digs deeper into investing as a subject, i view that as a good thing.

The increasing economic strength of China?

Do you believe you can cover steady expenditure in retirement by day trading a natrrow range of high volatility investments?

Mothman

Hard to give the OP a comparison to a passive index as it's a mildly actively managaged portfolio using 5 underlying funds. 

Googling 'True Potential Aggresive Portfolio Factsheet November 2024' took me to a pdf of the latest factsheet.

Also if you google just 'True Potential Aggressive Portfolio' it takes you to a pdf of the fact sheet from a year earlier so you can see any change in asset allocation.

Bostonerimus1

Mothman said:

Hard to give the OP a comparison to a passive index as it's a mildly actively managaged portfolio using 5 underlying funds. 

Googling 'True Potential Aggresive Portfolio Factsheet November 2024' took me to a pdf of the latest factsheet.

Also if you google just 'True Potential Aggressive Portfolio' it takes you to a pdf of the fact sheet from a year earlier so you can see any change in asset allocation.

The "Aggressive Portfolio" is currently equity heavy, as you'd expect. The relatively low losses in 21/22 probably means that they went for some "safety", but by doing that they missed out on some of the rally in equities. They might have a requirement to keep to some volatility threshold and were forced to change asset allocation. Of course they might also think that they can time the market and are buying and selling believing it's a good strategy...Bottomline here is that I've done nothing with my portfolio over the last 5 years and I have a cumulative return of 70% compared to True Potential's 40% return. It's apples and oranges of course, but paying for active management certainly doesn't guaranteed better returns than a "do nothing indexing" approach.

dunstonh

Bostonerimus1 said:

Mothman said:

Hard to give the OP a comparison to a passive index as it's a mildly actively managaged portfolio using 5 underlying funds. 

Googling 'True Potential Aggresive Portfolio Factsheet November 2024' took me to a pdf of the latest factsheet.

Also if you google just 'True Potential Aggressive Portfolio' it takes you to a pdf of the fact sheet from a year earlier so you can see any change in asset allocation.

The "Aggressive Portfolio" is currently equity heavy, as you'd expect. The relatively low losses in 21/22 probably means that they went for some "safety", but by doing that they missed out on some of the rally in equities. They might have a requirement to keep to some volatility threshold and were forced to change asset allocation. Of course they might also think that they can time the market and are buying and selling believing it's a good strategy...Bottomline here is that I've done nothing with my portfolio over the last 5 years and I have a cumulative return of 70% compared to True Potential's 40% return. It's apples and oranges of course, but paying for active management certainly doesn't guaranteed better returns than a "do nothing indexing" approach.

Its worth noting that you are in N America and US returns in USD are about 20% higher than GBP over the last 2 years.

(not supporting the use of TP but just pointing out a difference in GBP domicile to USD domicile over the last couple of years)

Bostonerimus1

dunstonh said:

Bostonerimus1 said:

Mothman said:

Hard to give the OP a comparison to a passive index as it's a mildly actively managaged portfolio using 5 underlying funds. 

Googling 'True Potential Aggresive Portfolio Factsheet November 2024' took me to a pdf of the latest factsheet.

Also if you google just 'True Potential Aggressive Portfolio' it takes you to a pdf of the fact sheet from a year earlier so you can see any change in asset allocation.

The "Aggressive Portfolio" is currently equity heavy, as you'd expect. The relatively low losses in 21/22 probably means that they went for some "safety", but by doing that they missed out on some of the rally in equities. They might have a requirement to keep to some volatility threshold and were forced to change asset allocation. Of course they might also think that they can time the market and are buying and selling believing it's a good strategy...Bottomline here is that I've done nothing with my portfolio over the last 5 years and I have a cumulative return of 70% compared to True Potential's 40% return. It's apples and oranges of course, but paying for active management certainly doesn't guaranteed better returns than a "do nothing indexing" approach.

Its worth noting that you are in N America and US returns in USD are about 20% higher than GBP over the last 2 years.

(not supporting the use of TP but just pointing out a difference in GBP domicile to USD domicile over the last couple of years)

There is a slight advantage to me investing in $, but a UK investor invested in something like UK Vanguard's FTSE Global All Cap Index fund would have a cumulative gain of 71% over the past 5 years. VLS80 has returned 45% with a simple rebalancing strategy. Of course True Potential might have rules or models that require them to change their asset allocation in certain circumstances and a 40% return over 5 years is better than some, but it's also worse than many. Reading their annual reports is a hoot as they are full of the usual financial industry cliches.

felix54

Thanks for the info all. Had taken some comfort in TP’s low losses over covid. Not experienced enough to self manage so may be that the lower end of risk is better for me bearing in mind it’s a pension rather than an additional investment?.  Definitely all responses are great food for thought!. By the way charges are Portfolio ongoing charge 0.75%; Adviser fee 0.5% and Platform fee 0.4%. 

ComicGeek

I was with TP for only a couple of years but moved it all across to a self managed SIPP at Fidelity last Autumn.

The best decision I made was spending a couple of afternoons watching/reading up on simple pensions, simple multi asset funds, and the impact of high advisor/portfolio fees on pension funds. I also spent time reading up on what the risk levels actually mean - just because something is lower risk doesn't mean that you won't ever lose money, and the risk of poor investment performance over a long period of time is worse than short term market fluctuations.

The second best decision I made was then setting up our own personal SIPPs at Fidelity and transferring everything out of TP. I picked 3 simple multi asset funds, and may not ever need to change funds until I'm closer to retirement and want to adjust my risk profile.

You don't have to be a financial genius to get your head around it all - the best strategy is to keep it simple, the complicated strategies are just excuses for charging more fees. I definitely was guilty of just trusting my IFA (who then sold the business onto a non independent FA at TP), and I should have taken the time to understand it all years ago - our pension pots would have been a lot larger now if I had done so.