Exposed: The Shocking Underperformance of Trusted UK Pension Funds

There is a shocking destruction of UK pensions. Sadly it is by funds entrusted by employers or IFAs or wealth managers.

I did a simple experiment. I selected a group of funds, not too few to be fair. I selected household names and different brands. I picked ones which were not just UK but also Europe, US too and indeed China (the world’s second largest economy).

I selected ones which were linked to innovation – ie important themes of the day and technology.

I didn’t just look at one year, but two. A bad and a good year.

I didn’t just look at big companies, but included funds focussed on small companies too.

What more diversification could there be.

The results were shocking.

They all fell in 2022. A bad year. But they fell regardless of country or sector focus. They fell more than even the market.

That would be fine but the next year, 2023, one of the best in history for the markets, they not only didn’t make up for the 2022 losses, but actually some fell even more, yet again.

This is a clear evidence of the failure of professional fund managers to deliver value for their clients. They charge high fees and commissions, but they cannot beat the market or even match it.

They are not experts, but gamblers who rely on luck and hype. They are not accountable, but hide behind complex jargon and obscure benchmarks. They are not transparent, but conceal their holdings and strategies from public scrutiny.

What can you do to protect your pension from this shocking destruction? The answer is simple: learn to DIY. Do not entrust your hard-earned money to someone else who does not care about your future.

Learn how to invest yourself, using low-cost and diversified tools such as index funds, exchange-traded funds, or robo-advisors. Learn how to assess your risk tolerance, set your goals, and plan your asset allocation. Learn how to monitor your performance, rebalance your portfolio, and adjust your strategy as needed.

DIY investing is not rocket science. It is a skill that anyone can acquire with some time and effort. It is a way to take control of your financial destiny and avoid the shocking destruction of UK pensions. It is a way to secure your retirement and achieve your dreams.

2022:

• Invesco Mortgage Capital -54%

• Schroders Capital Global Innovation -53%

• Baillie Gifford US Growth Trust -52%

• Scottish Mortgage Investment Trust -46%

• Baillie Gifford European Growth Trust -42%

• Abrdn UK Smaller Companies Growth Trust -39%

• Schroder British Opportunities Trust -36%

• BlackRock Greater Europe Investment Trust -32%

• Abrdn Property Income Trust -23%

• Abrdn China Investment Company -23%
  

2023:

• Invesco Mortgage Capital -33%

• Schroders Capital Global Innovation -5%

• Baillie Gifford US Growth Trust +22%

• Scottish Mortgage Investment Trust  +12%

• Baillie Gifford European Growth Trust +7%

• Abrdn UK Smaller Companies Growth Trust -1%

• Schroder British Opportunities Trust +9%

• BlackRock Greater Europe Investment Trust +20%

• Abrdn Property Income Trust -15%

• Abrdn China Investment Company -23%

Alpesh B Patel OBE

www.campaignforamillion.com

Visit www.alpeshpatel.com/shares for more and see www.alpeshpatel.com/links

Disclaimer: The content provided on this blog is for informational purposes only and does not constitute financial advice. The opinions expressed here are the author's own and do not reflect the views of any associated companies. Investing in financial markets involves risk, including the potential loss of your invested capital. Past performance is not indicative of future results. 

You should not invest money that you cannot afford to lose. Mentions of specific securities, investment strategies, or financial products do not constitute an endorsement or recommendation. The author may hold positions in the securities discussed, but these should not be viewed as personalised investment advice.  

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