Pension Fund - Getting out of bonds

baby astrolab

My pension fund is in bonds, mainly government, and they are taking a hammering at the minute. I believe this trend will continue as Ireland, Portugal, Spain, Italy and Belgium continue to be targeted by Bond markets and I want to shift my funds.
I'm tempted by Japanese Equities (I'm with Aviva) because they seem to be on a gradual rise from an all time low in Dec '08.
Does anyone know anything about Japanese Equities? Alternatively, is there a natural hedge against European Government bonds that I should be looking at?
Thanks

FoxT

I dont know anything about Japanese equities - and I would be reluctant to move my entire fund into a single asset class/country. The Asia/Pac fund looks like it is doing relatively well - if it was me I'd look at that a bit closer. The advantage is it is more diverse, so in theory should be less volatile .

Jim2007

baby astrolab wrote: »

My pension fund is in bonds, mainly government, and they are taking a hammering at the minute. I believe this trend will continue as Ireland, Portugal, Spain, Italy and Belgium continue to be targeted by Bond markets and I want to shift my funds.
I'm tempted by Japanese Equities (I'm with Aviva) because they seem to be on a gradual rise from an all time low in Dec '08.
Does anyone know anything about Japanese Equities? Alternatively, is there a natural hedge against European Government bonds that I should be looking at?
Thanks

Let me start by saying that the principles of financial risk management have not suddenly changed - maintaining your asset allocation across various asset classes is still the best way to manage risk. Placing all your funds in a single asset class is always a high risk strategy!

Another important factor is how close you are to retiring. As you get closer to that time, you should be switching to income generating type assets, such as bonds, blue chips and so on.

I'm also unclear if you are holding bonds or a bond fund... holding good quality bonds to maturity in an income generating portfolio is a very reasonable risk strategy...

Bottom line is to concentrate on getting your asset allocation right for your age range and rebalance at least once a year. One thing I would say though is that as you get closer to retirement age, I would substitute bond funds for good quality bonds with the intention of holding them to maturity.

Good luck with that,

Jim (Switzerland)

I don't know your age range, but don't lump your fund all into one asset class. DIVERSIFY.
If you are still young you could consider equities but I would stick to bonds & cash if you're <10 years to go

baby astrolab

Thanks a lot guys. A common theme there! I've 20+ years to go so I'll look at diversification.