Ready made/managed pension portfolio

[cbehagg242]

Thought i'd post here as I usually get good advice with money and I want to maximise my personal pension contributions.

Key points:
I have at least 30 years before I can start taking my pension so have time on my side for compounding.
I work via my ltd company so make employer contributions.
I'm not confident enough to pick funds so have stayed away from SIPP's.

Last year I split £20k between 2 different ready-made pension portfolio's with the idea being that I don't know much about picking funds so best bet is to leave it to someone who does.

1) PensionBee has barely made any returns since June 17, but was useful to gobble up previous PAYE pensions that I had.
2) Aviva Investors Multi-asset Fund IV link is currently returning 1.85% since May 17. This charges 0.75% pa overall.

Should I be expecting bigger returns after almost a year? Or are my expectations off expecting more than a few hundred quid return off a 10k investment?

Any recommendations for pension providers that accept employer contributions and provide a managed fund offering?

I was half tempted to go with HL's SIPP and select the top 10 Most popular SIPP funds on their website but don't think that's a great idea.
Or more likely something like Fidelty's PathFinder offering: link

Ideas welcome

Thanks

Edited by cbehagg242 on Monday 19th March 15:30

[sidicks]

cbehagg242 said:

Thought i'd post here as I usually get good advice with money and I want to maximise my personal pension contributions.

Key points:
I have at least 30 years before I can start taking my pension so have time on my side for compounding.
I work via my ltd company so make employer contributions.
I'm not confident enough to pick funds so have stayed away from SIPP's.

Last year I split £20k between 2 different ready-made pension portfolio's with the idea being that I don't know much about picking funds so best bet is to leave it to someone who does.

1) PensionBee has barely made any returns since June 17, but was useful to gobble up previous PAYE pensions that I had.
2) Aviva Investors Multi-asset Fund IV link is currently returning 1.85% since May 17. This charges 0.75% pa overall.

Should I be expecting bigger returns after almost a year? Or are my expectations off expecting more than a few hundred quid return off a 10k investment?

Any recommendations for pension providers that accept employer contributions and provide a managed fund offering?

I was half tempted to go with HL's SIPP and select the top 10 Most popular SIPP funds on their website but don't think that's a great idea.

Ideas welcome

Thanks

A few key thoughts:
1) if you have a long time until retirement you are well placed to absorb market volatility in anticipation of higher returns - maximise your allocation to equity
2) investment performance can only credibly be assessed over longer timescales 3-5 years
3) investment performance can only credibly be assess against the benchmark the assets are being run against
4) realistic return expectations will be linked to the amount of risk you are prepared to take.

Whilst a managed fund should provide some diversification benefits and seek to provide some downside risk management, it will also be expected to underperform equity markets over the longer term.

Whilst you are still making contributions, you should be less concerned about short-term losses - that just means that future contributions are buying more units each time.
As you get much closer to retirement, the strategy should be rebalanced to take less risk and be less exposed to (equity) market falls.

[xeny]

cbehagg242 said:

Ideas welcome

Thanks

Edited by cbehagg242 on Monday 19th March 15:30

To unpack a little of sidick's thoughts -

Shares (equities) have higher returns than other assets on average, but the return is very variable year to year - they're great when you're in the early accumulation period (as you are), as you've got time for the returns to average out.

As you get older, move your holdings to something less volatile, but with a lower return, like a multi asset fund.

If you're at a loss as to what to invest in with equities, I found this argument provided a decent starting point:

http://monevator.com/why-a-total-world-equity-inde...

Typically equities might average ~8% return before accounting for inflation, but that's a very variable rate of return.

[LeadFarmer]

cbehagg242 said:

I was half tempted to go with HL's SIPP and select the top 10 Most popular SIPP funds on their website but don't think that's a great idea.

Any reason why you think that would be a bad idea?

HL do managed versions of their SIPP's, where they manage your investment for you, with a choice of risk of low, medium or high.

[33q]

I have an HL medium risk managed SIPP.

Seems to do ok....better than the shares I've picked in the past!

[sas62]

Do you have access to the full range of funds that Aviva make available on its stakeholder platform?

The two funds that I have currently in my daughters' Aviva pensions are ;

Liontrust Sustainable Future UK Growth S2 (up 11.4% last year)
Liontrust Sustainable Future Absolute Growth S2 (up 11.1% in last year)

Both daughters have over 30 years to retirement.

[CzechItOut]

cbehagg242 said:

1) PensionBee has barely made any returns since June 17, but was useful to gobble up previous PAYE pensions that I had.
2) Aviva Investors Multi-asset Fund IV link is currently returning 1.85% since May 17. This charges 0.75% pa overall.

Should I be expecting bigger returns after almost a year? Or are my expectations off expecting more than a few hundred quid return off a 10k investment?

The FTSE100 is actually lower now than 6-months ago, so you haven't done too badly.

As for a SIPP, most of the big providers HL, Fidelity etc. do a ready made portfolio based on your level of risk. However, your idea of picking from the recommended funds isn't a bad one.

[cbehagg242]

Thanks all four your replies.

I did look at the HL Portfolio+ offering but I was put off on the 1.46% ongoing charge on the 'Adventurous Growth' ready made fund. There's also the 0.45 service charge to be added. In comparison, I now pay 0.75% for the Aviva ready made all in. Fideltity's Pathfinder is 0.60% all in.

@xeny, thanks for the link, made quite interesting reading as I'm still learning in the world of investments.

@LeadFarmer, I thought it would be a bad idea as I didn't really know what the funds were. I associated it to the numpties that bought bitcoin a few months ago without knowing what it actually was. On reflection it makes more sense as they have been selected by someone in the know, so could still be an option.

@sas62, I don't think so I am using their ready made portfolio, will look into it though. The returns you stated were more in line with what I was expecting.

I might have a play with both, half the amount into a managed fund and half in a SIPP using the top recommended funds. At least if I royally c*ck up with the SIPP there's plenty of time for it to recover.

Cheers all