Hi,
25 y/o hoping to get some advice regarding the pension funds available to me through my company pension plan. I've recently started contributing 10% AVCs in addition to the 2% I was already contributing to get the employer contribution of 8%, so 20% total.
I've read a lot about the various pros and cons of different investment options, and listened to podcasts such as Informed Decisions so am aware of the dangers of leaving my money in a supposed "safe" fund with a high allocation towards bonds in addition to historical under-performance of active vs passive funds in most cases. Ideally I would just put the money into a globally diversified ETF such as VWCE. However, there are only four options available under the pension plan which include equities.
The provider is Mercer and there's two 'Do it for me' funds, which gradually move into more caution funds as you approach retirement age and then there's an option for do it yourself with other funds. This is the details of each of the funds:
Do it for me funds:
Appreciate any advice!!
25 y/o hoping to get some advice regarding the pension funds available to me through my company pension plan. I've recently started contributing 10% AVCs in addition to the 2% I was already contributing to get the employer contribution of 8%, so 20% total.
I've read a lot about the various pros and cons of different investment options, and listened to podcasts such as Informed Decisions so am aware of the dangers of leaving my money in a supposed "safe" fund with a high allocation towards bonds in addition to historical under-performance of active vs passive funds in most cases. Ideally I would just put the money into a globally diversified ETF such as VWCE. However, there are only four options available under the pension plan which include equities.
The provider is Mercer and there's two 'Do it for me' funds, which gradually move into more caution funds as you approach retirement age and then there's an option for do it yourself with other funds. This is the details of each of the funds:
Do it for me funds:
- (Default) Aspire Moderate Growth Portfolio: Active and passive mix; Split: 45% equities, 35% bonds, 13% listed real assets and the rest commodities and alternatives. Aim for fund is 4% return P.A. however it only started in 2021 so there's no historical performance. AMC is 0.23%.
- Aspire High Growth Portfolio: Also active & passive mix. Split: 72% equity; 13% bonds; 9.5% listed assets and the rest cash and alternatives. Running since 2012 with target of 5% returns P.A. Historical returns have been 5.1% past 5 years and 7.4% past 7 years. AMC 0.23%
- Passive global equity partial hedge: Allocation is 55% passive global equity unhedged, 35% passive global equity hedged and 9.5% passive emerging markets. Globally diversified with 67% North America, 10% Asia, 12% Europe, 5.5% Japan and the rest other. Has approx 1600 holdings with top 5 being apple, microsoft, google, amazon and tesla. Historical returns are 7% P.A. past 5 years and 8.4% P.A. past 8 but it is down the most this year at 17% (compared to 12 for moderate growth portfolio and 14.5 for high growth). AMC 0.08%.
- Passive sustainable equity fund: Likely won't go with this, down the most this year (20%), worse performance than the above fund over past two years at 6% PA and only started in 2020. Higher allocation to tech than the above also with 30% in tech vs 20% with the above passive fund.
Appreciate any advice!!