Which Funds? - FP New Generation Pension

whiteflag_3

EdInvestor wrote: »

This is a good example of why it's so much easier in a SIPP. All you do is decide on your sector allocation, go to Citywire and pick the best fund in each class and then buy them in the SIPP, which is certain to have them on the list..

Oh yes and how do you select the "best fund"? Is there such a thing?

Courtesy of an answer would be nice but not expected ED!

PPs are a real bore.Yyou have to go through this lengthy list, check each fund out for quality, takes ages, and even then you often end up with some pretty ordinary ones in some sectors as there are usually only a few 'star funds'.

Tedious stuff.

:rotfl: Didnt think it would take you long Ed but you've done it sooner than I thought:rotfl:

What are "star funds " btw?

As you know Ed, with PPs the pension provider has already done all the due diligence saving the investor time - far from tedious -all that extra research for free! And free time to do enjoyable things.

They are ACTUALLY keeping it simple , rather than "trying" to keep it simple:(

dunstonh

This is a good example of why it's so much easier in a SIPP. All you do is decide on your sector allocation, go to Citywire and pick the best fund in each class and then buy them in the SIPP, which is certain to have them on the list..

PPs are a real bore.Yyou have to go through this lengthy list, check each fund out for quality, takes ages, and even then you often end up with some pretty ordinary ones in some sectors as there are usually only a few 'star funds'.

Tedious stuff.

How is the decision to pick funds from a list of 40 or so funds harder than picking funds from a SIPP that offers around 2000 funds (and about 30,000 investment options)?

EdInvestor

As I said, having chosen your sector /asset allocation split ( and yes I agree with you Whiteflag, this is important), go to the Citywire site .Find the top 10 funds over 1,3,5 and preferably 10 years in each of your chosen sectors, pick one or two, check the fund manager is still in charge and add to list. Buy in SIPP, which will offer these best funds.

[Note: Past performance is no guide to the future but it's the best we've got. ]

The process should be investment driven, as in the SIPP, not wrapper driven, as in the PP.

This is basically what a good IFA will do when picking funds.That's why people like Dunstonh like to use fund supermarkets, which are the equivalent of SIPPs, because they offer the best performing funds.

whiteflag_3

EdInvestor wrote: »

This is basically what a good IFA will do when picking funds.

A good IFA has/ or will soon realise that they are no better at picking funds than you ED, and therefore should currently be looking at other ways to add value to their business rather than making a rod for their back!

MiserlyMartin

I have the same FP pension and have similar funds to choose. While I am feeling very bearish in general about having any money in pensions at all over the next 5 years, I certainly would avoid any UK funds. Perhaps put it in European and Emerging Markets, but this is very risky too. Really I don't know what to do to protect my pension.

TCA

Hi Martin. I read your other thread with interest. My funds currently sit in FP's Balanced Index Enhanced Fund of Funds and I'm looking to take on some more risk in my investments. Different to you I think. My analysis agrees with the other posters in that your IFA is certainly presenting you with a far riskier proposition than you are prepared to accept. I quite like the look of the First State Global Emerging Markets fund but it is high risk and for me it would be a small percentage of my overall pot - certainly not in the proportions your advisor is advocating. I'm not so averse to UK equity as you as I think this could be a good time for the dynamic/smaller company funds to pick up some good stocks. But I am more wary about the US and Europe. I'm no expert but this seems to be something I'm gleaning from my research. Likely wrong though I will still have some exposure built in, when I eventually do decide which funds to plump for. It's very difficult for a novice. Good luck with your own decision making.

TH1878

I've just left FP (as an employer, not a client).

It may be wise to look at the charging of that contract (I presume your plans begin with F46024?) as it doesn't offer any Large Fund Charge Reduction for funds over £20,000. Apart from for ex-group scheme members, that particular contract was closed in 2006 so don't expect a deluge of new funds.

TCA wrote: »

I've selected a few funds below based on performance and fund ratings from various websites. Has anyone any views on maybe 4 or 5 from this lot? Or any other better combinations to add in from my list of options?

First State Asia Pacific Leaders
Artemis Global Growth
BlackRock UK Dynamic
BlackRock UK Smaller Companies
BlackRock UK Equity
Invesco Perpetual High Income

and maybe First State Global Emerging Markets Leaders

I personally like all of those funds, but if it were my own money I doubt I'd be putting any in UK Smaller companies funds (in the current climate) as they are generally more susceptible to changes in the domestic economy.

The Blackrock Smaller Companies has lost 5.90% over the last month alone, and 16.17% over the year. Having said that, it's been a top quartile performer within the UK Smaller Companies Sector - similarly with Invesco Perpetual High Income (in the UK Equity Income Sector).

You'll probably find this and this useful

TCA

Thanks for the replies TH1878. My plan is a former works pension/new generation group pension scheme (F66429/...) and offers basic annual charges of 0.6% and 0.5% for transfers plus any additional amc's.

Cheers for the tip on smaller company funds. As you pointed out, I have looked over the longer term for good performance but any pointers for reducing the number of funds I selected is useful, as I think I should be going with maybe 4 or 5. Thanks for backing up my other choices.

TH1878

TCA wrote: »

Thanks for the replies TH1878. My plan is a former works pension/new generation group pension scheme (F66429/...) and offers basic annual charges of 0.6% and 0.5% for transfers plus any additional amc's.

Cheers for the tip on smaller company funds. As you pointed out, I have looked over the longer term for good performance but any pointers for reducing the number of funds I selected is useful, as I think I should be going with maybe 4 or 5. Thanks for backing up my other choices.

No probs.

One thing though, those AMCs suggest the Group scheme was written on a fee basis with FP paying nil commission. However, when you leave the group scheme, the plan becomes an individual one and is allocated an F46024 number instead of your F66429 one.

With some schemes, there are stipulations that if you leave the scheme then the AMC goes up for both regs and TVs - it would be worth checking this. If there is no stipulation, then you would be hard pressed to beat those AMCs elsewhere, but you do have a limited fund range so don't let that be the only choice.

Check out the pdf's in my previous post - that's got full performance details of all the funds available to you and how they compare to the rest of their sector.

TCA

TH1878 wrote: »

One thing though, those AMCs suggest the Group scheme was written on a fee basis with FP paying nil commission. However, when you leave the group scheme, the plan becomes an individual one and is allocated an F46024 number instead of your F66429 one.

With some schemes, there are stipulations that if you leave the scheme then the AMC goes up for both regs and TVs - it would be worth checking this. If there is no stipulation, then you would be hard pressed to beat those AMCs elsewhere, but you do have a limited fund range so don't let that be the only choice.

Check out the pdf's in my previous post - that's got full performance details of all the funds available to you and how they compare to the rest of their sector.

Thanks again. Those links are handy after I painstakingly went through all the funds on citywire.co.uk on an individual basis noting their relative performances. I should say that there are also lower risks funds that I didn't note in my OP, so the range is wider.

As for the Group Scheme being written on a fee basis with FP paying nil commission, I've no idea about that. And not sure what it means to be honest or how it affects me. My last correspondence from FP says that Johnson Fleming (the scheme IFA) will get paid a commission from the charges paid by me. Is that what you mean?

It's a new scheme (about 1 year old), the previous version being run by DC Solutions. The transfer following the post A-day review was a bit hard to follow, with several different names of administrators and IFAs being banded about. I guess I'll have to contact them directly (or plough into the documentation) to find out if there are any ramifications for charges on leaving the scheme.