Only if you hold actual bonds/gilts yourself. You wont see that fixed return inside a fund like LS60/80. IMO far better to hold your own bonds and couple with an all world tracker.
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Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
- Start date
Well usually in that scenario the bonds will steady the ship, usually. Obviously those stats you link include the worst bond crash in 200 years.
IMO bond funds still carry significant risks of large drawdowns, these low risk ratings are misleading imo.
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Soldato
NEST have what they're calling a Sharia Fund, basically companies that fit in with whatever laws etc are Sharia compliant, its performance seems to be well above the other funds on Nest's list..
Same story, 37% of this fund is in the magnificent 7 vs about 17% in an all world tracker, this is where the performance comes from.
This is why need to always delve past the cumulative numbers and see why it had a bump and in this case having high % Mag 7 is the real reason and would have been no different to bolting on S&P 500 to a World Tracker.
Having seen recent responses over the past week the Vanguard Developed and Developed exc. UK have a good mixture for the foreseeable future. You can always bolt on UK, small cap or emerging but riding out Developed is doable due to Mag 7.
I'll have a look.I think a global tracker would be better, set and forget. Lifestrategy funds are heavily biased to their home market.
Something like this perhaps:
Vanguard Asset Management | Personal Investing in the UK | Vanguard UK Investor
www.vanguardinvestor.co.uk
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Soldato
I should probably look at moving mine then, its in the low risk low reward fund at the mo, I'll be dead before I retire so might stick it in something riskier, because why not...
Yeah I saw the same HSBC Islamic fund in my scheme, outperforming every other fund. Assumed it was something to do with the Middle East, maybe oil or something. Only when I looked at the factsheet did I realise it was the same big US tech companies, like you say at an even greater exposure than a general US equity fund. Its a misleading name in my opinion.
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Loads of choice!
Vanguard FTSE Global All Cap Index Fund
Vanguard FTSE All-World UCITS ETF USD Accumulation (VWRP)
Vanguard FTSE Developed World UCITS ETF USD Accumulation (VHVG)
Vanguard FTSE Developed World ex-U.K. Equity Index Fund
Vanguard FTSE All-World High Dividend Yield UCITS ETF USD Distributing (VHYL)
Plug them into a comparison tool and you'll see how they have been doing in recent times.
The ones that stood out most were based on fees and return:
Vanguard FTSE Developed World UCITS ETF USD Accumulation (VHVG) 0.12%
Vanguard FTSE Developed World ex-U.K. Equity Index Fund 0.14%
Loads will argue it missing bits but do your own research to see what works.
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Soldato
I wouldn't look at it like that. You should think how much income you may want when you retire and using a 4% rule (drawdown rate or a thermotical annuity rate you might get offered when you retire). So for example if you think you want a work/private pension that will pay you £20k a year you would need a pension pot of £500,000. After that it's just a case of working out the compounding effect. If your 40 now and have £53k in your pension paying in £540 per month with an investment return of 7% you would get to £500k by the time you were 60.
Tbh, I've tried to find a websites to do what you want to do and there's nothing out there, most of the tools are all copy/paste jobs with the same limited functionality so in the end I just built my own. If you want I can show you how to build it, it's nothing complicated,
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Sounds great, thanks.I wouldn't look at it like that. You should think how much income you may want when you retire and using a 4% rule (drawdown rate or a thermotical annuity rate you might get offered when you retire). So for example if you think you want a work/private pension that will pay you £20k a year you would need a pension pot of £500,000. After that it's just a case of working out the compounding effect. If your 40 now and have £53k in your pension paying in £540 per month with an investment return of 7% you would get to £500k by the time you were 60.
Tbh, I've tried to find a websites to do what you want to do and there's nothing out there, most of the tools are all copy/paste jobs with the same limited functionality so in the end I just built my own. If you want I can show you how to build it, it's nothing complicated,
I'm 39 and have almost 80k in my pot at the minute spread between Vanguard which is all my old pensions consolidated.
Plus my current workplace pension with Scottish Widows.
Soldato
1) I set this up in Excel but I'm guessing this work in Google Docs as well. Below are the headings and the formulas. The key ones ae you opening balance and the Return rate, the return rate is anchored and will be the key determinate on the forecast The formula takes the current subtotal * it by the annual return rate (given as 7% in this example) divided by 12 so you get the incremental growth monthly.
The sub total for the next month is the Total Pot from the month before + the new contribution.
2) Once you have setup the first two rows drag it down for as far out as you want to. Just remember this showing the pension forecast on a monthly basis so you might want to add a filter to the headings so you can view it by month (maybe in your birth month).
The are some optional columns I've added, you don't need them but I would highly recommend the third point below:
i) in column B you can add the age you will be in your birth month, handy for a quick reference so you can see how old you will be without having to think about it.
ii) In column E you might want to add in the effect of annual pay rises on your contributions. When I set mine up I used 1.5%, it doesn't make a big difference but it makes it more accurate.
iii) Column I is used for noting the actual valuation of my pension so I can track it's performance against my forecast. That way if you pension is lagging you might be able to make some changes to where you money is being invested (if you pension provider/employer allows it) or up your contributions.
Adding on small cap managed or even private equity is a good idea in the long term.
Soldato
So, Nest have the following..
Ethical Fund
Sharia Fund
Higher Risk Fund
Lower Growth Fund
Retirement Date Fund
I should imagine they have a lot of people in the Retirement Date Fund as that's the default one..
If a small cap was to go on a good run would they transfer into the mid or large or is this a case of catching them when they got hot in the first place?
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Absolutely they would move up and eventually be captured by the index buyers as well.
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What do people think about emerging markets?
Seems to be information out there that EM is underpriced and a big future opportunity. 10-15% EM seems to be the commonly recommended proportion in a portfolio.
But over the past 5 years EM index fund growth is low, at only 10% compared to around 180% in a developed world index.
The Pensioncraft guy said in one of his videos that he doesn't bother with EM.
Seems to be information out there that EM is underpriced and a big future opportunity. 10-15% EM seems to be the commonly recommended proportion in a portfolio.
But over the past 5 years EM index fund growth is low, at only 10% compared to around 180% in a developed world index.
The Pensioncraft guy said in one of his videos that he doesn't bother with EM.
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Soldato
- Joined
- 1 Dec 2003
- Posts
- 3,490
i dip into my pension now and again to see how it's performing. when covid hit it took a battering but since then it's slowly increased again
i have options to change it to different markets but they come with higher risk.
i'll likely just leave it where it is and hope it steadily increases.
i have options to change it to different markets but they come with higher risk.
i'll likely just leave it where it is and hope it steadily increases.
How old you are should be a factor when looking at risk.
Which provider and what funds? It might be worthwhile checking your options as steady increases could still leave you short.