Nest Sharia fund or 2040

samps1973

I am currently with the nest Sharia fund which is taking a bit of.a beating as with all investments at the moment.
I know that you only lose or realise the loss when you sell your shares. So far I’ve been holding on and hoping it starts going up the same as everyone with their investments.
so far it’s dropped from 72k to 62k. I also have 16 yrs left till my retirement date.
mine and my employers contributions are about £300 pm which I can’t do much about. I have also been putting everything above what I earn above £50,270 into the pension so I get the tax back. I put in roughly £700 and claim the tax back at the end of the year.

I’m not sure what to do.

Cut my losses and go back to the nest 2040 retirement fund or to continue with the Sharia fund?

Im not sure whether to continue putting in the £700 pm and getting the shares at a better price and dollar cost average or save the £700 and put in an isa until things start to improve in the stock market and pay a lump sum before the next tax year, if it improves by then.

I know a bit about investing and know you only lose if you sell.

Just wondering what you guys are doing at the moment?. Nest also do another pension which is even less risk than the 2040 I think.

thanks

dunstonh

I am currently with the nest Sharia fund which is taking a bit of.a beating as with all investments at the moment.

Its not really taking a beating.  its down less than a crash currently (although in two days time when US prices show, it may be back in crash territory again).

I know that you only lose or realise the loss when you sell your shares. So far I’ve been holding on and hoping it starts going up the same as everyone with their investments.

You do realise that most large negative periods play out over many months or years?     We are barely two months into this, and it's still higher than it was 12 months ago.   Many crashes take you back multiple years.    

This is very mild so far.

I’m not sure what to do.
Cut my losses and go back to the nest 2040 retirement fund or to continue with the Sharia fund?

What has changed for you?
stockmarket crashes occur around once every 4 years.  So, with 16 years until retirement, you were likely to see 3 or 4 of them.   You chose to invest in an extremely high risk equities fund that is highly volatile.  Its doing exactly what it is expected to do.   So, why would you change it if its acting normally and to be expected?

Im not sure whether to continue putting in the £700 pm and getting the shares at a better price and dollar cost average or save the £700 and put in an isa until things start to improve in the stock market and pay a lump sum before the next tax year, if it improves by then.

Or putting that another way, you want to stop buying units whilst they are cheaper and but buy them later when they are more expensive.   (you are assuming a quick recovery - its possible but you should be prepared to measure in years or even a decade).

Just wondering what you guys are doing at the moment?

Nothing different.   it's just another shrug of the shoulders and "here we go again" comment.  Just as it was last time and all the times before (except the first time which is usually a bit scary for a newbie).

LHW99

I believe NEST only lets you have one fund at a time, so you would have to swap it all over just when you would crystallise the loss.. 

I have also been putting everything above what I earn above £50,270 into the pension so I get the tax back. I put in roughly £700 and claim the tax back at the end of the year.

If you are really upset by the drop, why not open a PP or SIPP separately and put your additional contributions there. You could choose a less volatile fund in that pension, but leave your /your employer's autoenrollment contributions as they are (and pick up some cheaper units as dunstonh reminds you).

You will still find it will go up and down, but maybe less, or with a different phase / frequency to the Sharia fund

barnstar2077

Personally I would just carry on as you have been and just not check on it again until a few days after you hear some good news about share prices on the radio/news.

Sam_666

You have 16y until retirement and worried about TODAYs market prices!!!
What about market prices in 16y? What do you think will happen then?

Keep carrying on and paying in pension as before and leave screaming headlines for those retiring this year.

Albermarle

Sam_666 said:

You have 16y until retirement and worried about TODAYs market prices!!!
What about market prices in 16y? What do you think will happen then?

Keep carrying on and paying in pension as before and leave screaming headlines for those retiring this year.

Plus the OP could still have this pension fund well into retirement, so a lot longer than 16 years.

However as a general point the Nest Sharia fund would be too volatile for most people, so it is sensible for the OP to think again about their investment strategy if it is making them nervous.

samps1973

Thank you for the replies.

Before the tariffs issue the Sharia fund was doing very well as I’m sure you know and I guess them companies haven’t changed much. Also the Sharia fund has 2,400 stocks so is well diversified.

I think for the next 10 - 15 years I will continue to put my overpayments into the sharia fund and put it into a lower risk one a few years before I retire.

Sinse the tariff issues, my pension has gone down by 10k so it just feels like I’m throwing the £700 pm away, however I should look at it as buying the shares cheaper. I also think the 20% I receive as tax relief at source and the other 20% I’m going to claim back every year I’d be silly not to continue.

Thank you

Notepad_Phil

samps1973 said:

Thank you for the replies.

Before the tariffs issue the Sharia fund was doing very well as I’m sure you know and I guess them companies haven’t changed much. Also the Sharia fund has 2,400 stocks so is well diversified.

I think for the next 10 - 15 years I will continue to put my overpayments into the sharia fund and put it into a lower risk one a few years before I retire.

Sinse the tariff issues, my pension has gone down by 10k so it just feels like I’m throwing the £700 pm away, however I should look at it as buying the shares cheaper. I also think the 20% I receive as tax relief at source and the other 20% I’m going to claim back every year I’d be silly not to continue.

Thank you

I'm not with NEST myself, but are you sure about your information about diversification?

My understanding was that due to its nature the Sharia fund has ended up being a very tech heavy fund with a hundred or so equity companies but with a very large percentage in the top dozen of them which have not typically fared well e.g. Tesla and Nvidia as just a couple of examples.

As I say, I'm not with NEST myself so apologies if what I now go on to say is completely wrong, but I managed to find this page https://www.nestpensions.org.uk/schemeweb/nest/investing-your-pension/fund-choices/sharia-fund.html but when you click on 'investment information tool' it seems to take you to the Nest Retirement Date Fund which does have 2516 companies but it appears to me that you then have to change the filter to the Nest Sharia fund which then shows 118 companies. That is the kind of number that I was expecting to see, and a very large percentage will be in a very small number of those companies.

I've a memory from a post on here that that it was only relatively recently that the Sharia fund started adding some non-equity assets into the mix, so things might have been looking a lot worse if that had never happened.

QrizB

Notepad_Phil said:

I've a memory from a post on here that that it was only relatively recently that the Sharia fund started adding some non-equity assets into the mix, so things might have been looking a lot worse if that had never happened.

That'll possibly be the "changes to fund" thread that I bumped earlier:

https://forums.moneysavingexpert.com/discussion/6560616/nest-sharia-changes-to-fund#latest

samps1973

@Notepad_Phil

Thank you for the reply. I think you are correct and nest have made a mistake on their website. The Sharia fund has 118 stocks and the retirement date 2040 fund has 2,400 so not so diversified after all.

Back to the drawing board 🤔

I noticed yesterday Sharia was about-0.08% and the 2040 fund was down about 0.7% on the ft website so I don’t think any fund is safe at the moment.

I’ll have a look at the stocks later. If it is the top 10 US I may consider changing to the 2040.

I’ve had a look at the 10yr graphs on the ft website and from what I’ve read on the nest website the Sharia fund is the better performer. Well, up until the tariffs anyway.

Thank you for letting me know.

samps1973

I need to learn a little about Sipps. I have a few small seperate investments ishares physical gold, ishares Europe financials etf and Berkshire Hathaway class b. These investments are doing ok considering the tariffs. I’m not sure if I could use these investments in a sipp. I don’t have much faith in the S&P 500 for obvious reasons.

I’m thinking about putting my overpayments in a sipp or private pension as somebody mentioned above. If I can include them investments in a sipp, does anybody know the best company to use for this? I know they all vary with fees etc.

also if I put my overpayments in a private pension are there any good ones you can recommend or are they all the same in this financial climate?

Thank you