Author Topic: UK Pension: Change from Mutual Fund to Index Tracker  (Read 787 times)

andrewjohnporter

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UK Pension: Change from Mutual Fund to Index Tracker
« on: February 16, 2017, 09:40:04 AM »
Hi all,

I am looking for some thoughts about my pension investments. I currently have two mutual fund pensions of £25k each with two different companies which both are pretty much the same and charge a ‘total’ of 1% (although who knows what they skim off on transaction charges, etc). They have 80% in equity, of this 38% is in UK shares, 20% in US and 17% in Dev Europe. Ideally I would like to switch to the Vanguard 80% LifeStrategy Fund however I am stuck with analyses paralyses. There are two main things stopping me, the high price and CAPE ratio of US shares and the low valuation of the UK pound.

It would kind of feel like buying high and selling low and I would ideally like to wait for a better time however they say that you shouldn’t try to time the market and that there is no ideal time and you may miss out on gains/low charges by waiting.

My latest thought is to keep one fund for 6-12 months and swap the other for a FTSE All Share tracker to take advantage of the low pound with eventually switching both over to the LIfeStrategy when markets and currencies are more favourable. Obviously though I will be less diversified and could be impacted negatively by that.

Thanks,

Andrew

frugledoc

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Re: UK Pension: Change from Mutual Fund to Index Tracker
« Reply #1 on: February 16, 2017, 11:09:05 AM »
What are your brokers charges for holding funds, usually ETFs are much cheaper.  Check the charges.

If ETFs are cheaper to hold as they are in hargreaves lansdowne by a huge margin then I would switch to a 2 ETF porfolio of VWRL Vanguard all world and VGOV for bonds.

Do not worry about buying high, do not try and market time, just do it. 

DOI:  My equity holdings are all in 1 ETF Vanguard all world, and I am always buying.    I have 330,000 pounds in it now and I don't care if it crashes as I would like to buy more over the years at cheaper prices.