HOW To Choose Funds In Your Pension And ISA
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- Опубліковано 1 лип 2024
- For most of us, all we need to build wealth for our future is a pension - often our workplace pension - and a stocks and shares ISA. But both of those simply refer to the wrapper, the box that our money goes into.
What really matters though is where the money in the box is invested - what funds you hold.
#investmentfunds #ISA #pensionsuk
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Another great video Pete👍
Thanks always for your helpful presentation
Great video and in marked contrast to just about ALL other UA-cam personal finance videos that tell me to filter based on funds that begin with a "V"
Another excellent video.
Straightforward and simple advice. Thanks. Please could you advise when you would not use this approach. For instance if you wanted to take more of an interest (not becoming a trader though) what other steps would you take. Is it worth doing a video on this?
Simply, and reassuring explained video. Liked it!
Glad it helped!
Think risk also depends on the size of the pension and how much it will give you upon retirement. My current workplace pension is in a safe risk free fund but is only going to pay out about £50/month in 7 years time when I retire. £50/month will make very little difference to my retiremennt plans so I am going to switch into a higher risk fund to try and get a bit more growth.
Next to John Bogle, you have helped me the most in my financial journey.
I’ll take that, VU! High praise indeed - thank you 🙏🏻
I have two pensions work place and private . Thanks to your videos i am finacial "ok" and just need to find and investmeny isa . Thank you for all the advice you give .
Thank you Vikki!
Right on topic for me! Just looking at the way my workplace pension provider is investing my money. After viewing this video, looks like they're doing an ok job.
Glad it was helpful, Andrew!
Great videos thanks. I work within the Railway and pay additional contributions into BRASS before it’s taxed so 41% free living in Scotland with a final salary pension. I’m 53 and have been in the same pension since 18 roughly 9% from myself and 11% from my employer. Do I need anymore? Thanks again for the great videos
Video from a few years back where you actually draw on-screen the “boxes” your talking about at the start of this video was really helpful for me. I dobt you have it listed.
It’ll be there still - not 100% sure which one you mean but I haven’t taken any down. For better or worse!
I stand to be corrected, but off the top of my head I seem to remember for UK investors, Lars Kroijer suggesting investing in bonds in your local currency i.e. pounds sterling, and globally diversified for stocks (although a bit of J L Collins might be slipping in there on the latter part). Correct me if I’m wrong, mis-remembering or mixing them up.
That is generally the approach. Using GBP hedged versions of funds to remove currency risk when investing in overseas bonds. Ramin does a great explanation of why here:
ua-cam.com/video/2dz_tgTQedQ/v-deo.html
When's the next video out then Pete?
Does anyone else use the AJ Bell fund screener ? It's so slow it's barely usable.
Great as always Pete. Disappointed however that you used Hargreaves Landsdown as an example platform to select the various criteria. They are frighteningly expensive and are still reeling from their behaviour during and after the Woodford scandal. Interactive Investor are the only one (as far as I know?) that is honest and decent enough to offer customers a flat fee and win lots of awards from top people like Which etc. I only mention this as lots of folk are drawn in subconsciously with auto-suggestion when we use an example in this way. I know you did qualify by saying that this is "not a recommendation by the way" ..... Just an observation. Gary Dunn PS: I have been investing in Multi-Asset funds for years so fully agree with this approach - keep up the good work.
when I started investing in a S&S ISA, I spread my money into 5 funds equally. I am now thinking that will mean duplication or sub optimal increases. should I reduce the amount of funds?
Hi, what lifetime ISA should I get? I'm a first time buyer. My partner has just opened one with money box however I'm still keeping my options open..
Do you do any live events Pete?
Haven’t done yet. Would you attend if I did?! And what would you want such an event to include?
so vanguard LS came up in the search it would appear i was wrong in thinking that was just a mix of shares and bonds and it holds other investments.you live and lean
That’s exactly what it holds. Multi-asset can also just mean two assets!
@@MeaningfulMoney good point
Great video - thank you. I am wondering how many funds I should have for a £250k pension pot? And if I can only find 2 Providers then is it OK to put £125k in each of 2 funds. I would like to spread amongst more providers (say 5?) for protection if the case of a Lehman Bros type scenario.
There’s no ‘right’ amount of funds, just whatever makes you comfortable. You may need to adjust the filters a bit to find more funds…
African small cap futures market fund for me. All in 👍
I'm seriously thinking of getting rid of the bonds element of my investments & placing the released cash in an interest-earning bank account.
I think a lot of people are thinking the same, Tony!
@MulberryEllie What are you balancing that with? What's your ballast?
I've been looking at PIBS for that part of my portfolio. Some good rates out there and a good fat balance sheet should reduce the risk. But not easy to diversify. Anyone else looking here too?
@@jonseddon4547 Maybe Pete could do a video on them?
A review of Bonds, gilts, PIBS and other similar alternatives (without making recommendations) would be helpful for navigating these less familiar waters
So I have 30 years until I retire and my workplace pension has the option of investing in a new fund that buys solar, wind and other renewables company. I can’t help but think that will be a huge market in 30 years. Is this a good idea?
Hi VH, as part of a diversified portfolio it's a good idea. I hold a few companies such as TRIG, NSF and UKW as well as some Crowdcube investments in the renewables sector.
My workplace pension has hardly moved in the last three years. This year after charges etc it lost 1.5k. Should I give it a go my self? There's around 75k in it.
It’s been a very challenging time for investors - many people’s investments values have barely held their own, even when adding new money. If you think you can do better, then that’s up to you, but I’d start by optimising the funds in the pension.
Regrettably many persons with multi asset investments suffered major losses on the bond part of their portfolios in the recent high inflation and corresponding high interest rate environment when bond prices plummeted. Bonds are not an effective diversifier especially when they decrease in value at the same time as equities. Interest rates will probably remain high (or higher than the very low rates of the recent past) for a few years whilst inflation is tamed. I will stick with my 10% cash and 90% equities mix. If however, anyone is enclined to have bonds in their portfolio then separate bond funds should be considered as this allows a more tactical buying or selling bonds position (depending on market and interest rate movements) rather than being unable to do this when bonds are effectively tied up in a multi asset fund.
Do u talk about which funds to buy in your book?
He is not allowed to tell you what specific funds to purchase due to FCA regulations.
Even if he did tell you which funds to buy... Are you going to take it as gospel's?
Do your own research based on your circumstances
I wondered if the HSBC Islamic Global Equity Index Fund is okay for these purposes?
😂😂😂
I have it in my pension performance has been good annualised return 10.8% versus the index it tracks is 11.4% so on par or ahead, of other global funds
Fees arent the best though?
high fees, there is hidden initial charge as well as the ongoing cost.
I want to start maxing out my contributions to £40k / yr, so I'm planning to make £32k contribution over every 12 month period and then claim the £10k additional rate relief at the end of the tax year. Is the claim for the additional tax relief part of the self-assessment return or can it be made separately? I dont usually make my s/a return until end of the calendar year so wondering if there's a new motivation to submit it early
Basically yes, you claim the additional relief in your tax return. There’s no obvious reason to bring it forward though. The additional relief doesn’t get added to your pension; it just reduces your tax bill by the 10k. I assume you also pay your tax bill at the end of the calendar year (I do the same) so you’ll just pay less tax then. If you’re due a rebate as a result, then there’s an incentive to pull it forward though…
I am 53 - I have more money saved in ISA's than my work DC Pension - I am a 40% Tax payer - would it make sense to start to transfer my ISA's into a pension fund?
Maybe. Certainly there would be a tax relief advantage to doing this, but I can’t advise here as to what you should do. Rather than move money, you could potentially start prioritising pension contributions now to redress the balance a bit?
I've got a question I was wondering about your take on it.
i have noticed that when people based in the UK talk about diversification it's mainly focused on globally diversified portfolios
When it's Americans , they seem to almost always be referring to US markets only, mainly s&p 500. Is this home bias justified?
I'd say, historically, probably yes.
With the strength of the dollar at the moment, you may be able to use that to get more for your money abroad.
Each market brings its own risks.
Yes, to a point. I wouldn’t encourage the same for UK investors though - I think you need proper global diversification.
@@slayerrocks2 appreciate the take, cheers.
@@MeaningfulMoney thanks for the reply. For me , the cost is a massive plus when using vanguards vusa . I've changed my pension to an s&p 500 tracker for a while as I want to take as much risk until I'm in my 40s. I will definitely be changing it at some point later in life. My issue is that every time the American market goes down, so does the rest of the world.
Maybe it's just a mental thing, my pension ( since I changed the fund) has skyrocketed and the future predicted( key word being predicted of course,) balance is a lot higher than it was with the previous fund ( over 200k more at retirement) .
I would suggest the US investors home bias is down to two very reasonable facts. The population of the US is about 5 times bigger than the UK, roughly analogous to the size of Europe. Plus the value of their stock market is a huge percentage of the world's combined stock market value. They simply have a bigger home to explore.
Home bias in those circumstances is much easier to justify.
I'm going to invest in 6 ETFs/ index funds using dollar cost averaging and then not sure what to invest my large lump sum amount into. I'm 21 and want to invest for the long term with good amount of risk
My pension is in NEST Pension how can I fix this ?
Your options are limited. But there are still some choices available to you.
Your options are limited. But there are still some choices available to you.
@@MeaningfulMoney any advice or something?
hi i have my own business and we have a work place pension with now pensions for our staff. i dont get to pick investments ive no idea what they invest in. should i be looking at moving?
i didnt know i had a chice on what they invested in.
As the business owner you could have a pension which gives you more options. But even in the workplace scheme there are likely to be some choices open to you, so I’d start by optimising there if you can
I was left a little disappointed was hoping for some recommendations
Tbh he always says he doesn't put recommendations for what you should invest in. As he does not give financial advice.
Are you on the Facebook group ?
If so I post a screen shot of some for you to look at
Pete can't recommend due to financial planner regulations. However, try looking at HSBC Global Strategy, Blackrock MyMap or Vanguard LifeStrategy as options in the multi asset globally diversified sector which are low cost
Pete I'm trying to draw my pension but they won't release it until I speak to a finance adviser, but I don't want to speak to them.. I don't want any..talk with them. Just want my money...
Depends on the pension. If it has any safeguarded rights, like a DB scheme, then you have no choice - they are regulatory rules that the pensions scheme has to abide by. Not fair, but for your protection.
Out of interest what is everyone in the comment section invested in?
I'm currently invested in S&P 500 UCITS ETF (VUSA), U.S. Equity Index Fund - Accumulation and Vanguard FTSE Global All Cap Index.
Although I was told they are all quite similar lol
Vanguard Life Strategy 100
@@LatinoAaron Ah ok what’s your reasoning behind it?
@@EZ1111 Because I saw a lot of guys on UA-cam say it's a great fund to invest in if you a. have a good amount of time to stay in the market and b. it's great if you don't know what you are doing.
HSBC Global Strategy Dynamic and BlackRock MyMap 6. I really shouldn't be in both of those as they overlap a lot.
A range of Investment Trusts.
Have 10 kids tax them each 10% 😅