Pension Performance with a default Aviva fund

MetaPhysical

First off, this is not a criticism of Aviva, I have found them great in every way.  This is more regarding the default fund with Aviva that my company subscribes its employees into - via SalSac in my case.

I do not think my  fund - risk rating 4/7 - is performing well enough.  It's a rebadged Black Rock mix of global equities and shares with 25% in the UK.  It achieved 7.4% Jan 24-Dec24 and 9% Jan23-Dec23.  I don't think that is at all good.  I'm 18 months from retirement, I do tend to be a "steady-as-she-goes" kind of person and I don't want to be at the cutting edge but not in the growth weeds equivalent of cash either. I have some DB pensions to the tune of £30k per year and this DC pot with Aviva is worth £600k.  I'd have expected better than the percentages I quoted considering this is a 4/7 risk rated fund.  I am aiming for a £25-30k income from that pot (on top of my DB) and I am currently 57. I'd appreciate your thoughts on that Aviva fund please?

My employer will only transfer by SalSac pension to Aviva so I need to keep that open whilst payment from salary, employer contribution, tax relief all go into that Aviva pot for the next two years - and I max out my 60k allowance. My employer will not agree to SalCac into anything other than Aviva.   However, I am considering the move of the majority of that Aviva pot to II with something like a Vanguard 60 Life Strategy fund - another 4/7.  I don't want to be all equities so I accept a bit of drop off in performance as a result.

Is my thinking sane here please?

Many thanks in advance.

Brie

Doesn't Aviva have alternative funds you can use?  Most DC funds I've ever seen had a variety available.

If it's just timing on the market do you need to take your Aviva fund so soon?  Why not just take the DB pots and leave the DC in place for a bit.  Basically that's what I did with 2 funds as when I retired the market had taken a bit of a dive.  It's looking better now and my funds are up 25% or so.  

Pat38493

As mentioned on the other thread, you would need to check with Aviva whether they allow partial transfers out if you want to transfer most of the money to another provider.

When my employer was using Aviva, you can probably move your investments to other funds but the list is quite limited if it's the same as what I had.

What did your fund do in 2022 and prior?  Lifestrategy 60 lost 11% in 2022.  Typically I look at 10 year trailing returns when assessing a fund rather than just the last 2 years.  

Generally, funds that are significantly biased towards UK investments have not done as well in the last decade or two, so if your current fund is 25% UK that explains part of the lower performance.  LS60 is also biased towards the UK I think but not by as much.

bjorn_toby_wilde

It could be worth looking at other funds with Aviva. I have some in Aviva MyM My Future Growth in a deferred company pension. That’s also a 4/7 rating but performance over the same period was 15.4 and 14.2 respectively.  Not stellar but reasonable performance.

Not all the funds are available in every Aviva pension though. This was one of the defaults when my company pension moved to Aviva from Zurich.

NithyaH

Which fund is it?  My workplace pension is with Aviva and invested in the MyM My Future Growth fund.  It’s a decent performer and has a good record against ‘peer’ funds such as the HSBC Global Strategy Dynamic fund.  I wouldn’t expect to be fully in this fund when I’m near retirement, but when I’m in my early 40s I’m happy with the performance.  

DRS1

If you are thinking of switching to another available Aviva fund then have a look at any bid/offer spread,  I was using some (admittedly very old) Aviva personal pensions to buy an annuity last year and thought it would be a good idea to move the money into a less volatile fund - something cash like perhaps.  I did not do it because there was a 5% spread.  Instead I checked the increase and decrease in fund value every other day while waiting for the annuity to go through.  I may have lost a bit but it was not 5%.
I assume you are not going to be buying an annuity in 2 years time?

MetaPhysical

Thanks for your thoughts folks.  These are the current performance numbers that I am not happy with.  However, I need to. "calibrate|" myself because others may say those numbers are not that bad.

31/12/23 - 31/12/24.      7.4%

31/12/22 - 31/12/23.      9.9%

31/12/21 - 31/12/22.     -14.6%

31/12/20 - 31/12/21.      9.8%

31/12/19 - 31/12/20.      6.8%

It's a MyM Growth/Balanced Risk (4/7) and I get low platform fees that my employer negotiated.  I am considering moving out into II, not just because of a bigger fund choice but also because the platform is better. Many guys from work have also moved into II or JPB.  I am cautious about moving the money and will only do so if I am convinced it is the only way to go. 

It often seems that I make a £5000 monthly contribution and it gets lost straight away - my fund seems to have been stuck at 600k-ish for ages despite the massive sacrifices I am making to put that much into it every month.  Yeah, I get it it's all about balance and the long term view but of that 600k, I have personally put in about 470k of it, only 130k is growth in the past eight years.  I just don't feel it is good enough.

arthur_fowler

MetaPhysical said:

Thanks for your thoughts folks.  These are the current performance numbers that I am not happy with.  However, I need to. "calibrate|" myself because others may say those numbers are not that bad.

31/12/23 - 31/12/24.      7.4%

31/12/22 - 31/12/23.      9.9%

31/12/21 - 31/12/22.     -14.6%

31/12/20 - 31/12/21.      9.8%

31/12/19 - 31/12/20.      6.8%

It's a MyM Growth/Balanced Risk (4/7) and I get low platform fees that my employer negotiated.  I am considering moving out into II, not just because of a bigger fund choice but also because the platform is better. Many guys from work have also moved into II or JPB.  I am cautious about moving the money and will only do so if I am convinced it is the only way to go. 

It often seems that I make a £5000 monthly contribution and it gets lost straight away - my fund seems to have been stuck at 600k-ish for ages despite the massive sacrifices I am making to put that much into it every month.  Yeah, I get it it's all about balance and the long term view but of that 600k, I have personally put in about 470k of it, only 130k is growth in the past eight years.  I just don't feel it is good enough.

Surely the performance is all about the fund choices not the platform. What is it about other platforms that would be worthwhile you paying extra for from your pension fund for? 

NithyaH

Have you compared those figures against other funds with a comparable asset mix?  You seem to be in a blend of the growth fund and a balanced fund, presumably to achieve a lower risk overall position (and perhaps as part of a life styling option).  If your plan is similar to mine, you can choose to go
all out into any of their funds (such as the growth fund).  But you need to compare like with like and think about what non-Aviva fund you would move into on ii.

Bostonerimus1

It's not good to dwell on poorly performing investments, just learn from them and move on, but you need to compare your fund performance with funds that have similar asset allocations. You must have had a choice of funds so maybe it’s your expectations and decision making that also need to be examined. But you have DBs in place and have made some good gains with your DC amounts so things could be far worse.

Albermarle

MetaPhysical said:

Thanks for your thoughts folks.  These are the current performance numbers that I am not happy with.  However, I need to. "calibrate|" myself because others may say those numbers are not that bad.

31/12/23 - 31/12/24.      7.4%

31/12/22 - 31/12/23.      9.9%

31/12/21 - 31/12/22.     -14.6%

31/12/20 - 31/12/21.      9.8%

31/12/19 - 31/12/20.      6.8%

It's a MyM Growth/Balanced Risk (4/7) and I get low platform fees that my employer negotiated.  I am considering moving out into II, not just because of a bigger fund choice but also because the platform is better. Many guys from work have also moved into II or JPB.  I am cautious about moving the money and will only do so if I am convinced it is the only way to go. 

It often seems that I make a £5000 monthly contribution and it gets lost straight away - my fund seems to have been stuck at 600k-ish for ages despite the massive sacrifices I am making to put that much into it every month.  Yeah, I get it it's all about balance and the long term view but of that 600k, I have personally put in about 470k of it, only 130k is growth in the past eight years.  I just don't feel it is good enough.

Risk ratings are a blunt instrument.

On a scale of 1 to 7 both Vanguard LS 60 and LS40 are rated as a 4
So as your Aviva fund is also 4, then you can compare 5 year performance as follows;

VLS60 26%
Your fund 19.3%
VLS 40 12%

In a market crash, those results would most likely be reversed.