At work I’ve got a pretty good retirement package. The company matches twice my contribution, up to a maximum of 1.5% – I put in 1.5% and they put in 3%. The pension is run by Friends Provident and there is a small but reasonable selection of funds with relatively inexpensive fees (typical mutual fund fees in the UK run at 1.8%):
- Stewardship Managed 0.5%
- Cash 0.5%
- BGI Consensus 0.5%
- BGI UK Equity Index 0.5%
- BGI Global Equity (50:50) Index 0.5%
- BGI World Equity Index 0.5%
- BGI European Equity Index 0.5%
- BGI US Equity Index 0.5%
- BGI Over 15 years UK Gilt Index 0.5%
- BGI UK Index-Linked Gilt Index 0.5%
- BGI UK Corporate Bond Index 0.5%
- Newton Balanced 0.62%
- Baillie Gifford UK Equity 0.5%
- HSBC Amanah Global Index 0.5%
- Artemis Global Growth 0.63%
- Artemis European Growth 0.57%
- Baillie Gifford Japanese Equity 0.56%
- First State Asia Pacific Leaders 0.60%
- M&G Property Portfolio 0.74%
I joined the retirement plan as soon as I started my job, but this was very much in my pre-investing knowledge days, so I decided to go for the default option, which is to invest all my money in the BGI Global Equity (50:50) Index. This is split between the UK (50%) and the US, Europe, Japan and the rest of the Far East. I think that this is a pretty reasonable choice for the default option as there is some diversification, but it is simple and so easy to understand.
Now that I have a little more knowledge of investing, I haven’t altered my choice. Its the cheapest way I’ve found to have foreign exposure in my portfolio (which I think I need) and its an index tracker (which I think is the only way to go).
In my other main investment, I’m with a fund supermarket where there is a lot more choice. I haven’t taken advantage of this choice at all, preferring instead to opt for a very basic FTSE All Share tracker. I sort of see the point of having lots of funds to choose from, but most of them are not as good as the index, and I can’t be bothered to spend too much time working out which ones are better.
Overall, I guess I’m a plain vanilla kind of investor. I think that’s ok and that vanilla’s a perfectly acceptable flavour.
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