plonkee money an english-er's thoughts on personal finance

October 23, 2007

choosing mutual funds

Filed under: investment — plonkee @ 12:00 pm

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%):

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.

Similar Posts:

If you like what you're reading, why not leave a comment below, subscribe to my feed, or check out some of my best posts.

Powered by WordPress