pension investment question

aidanki

hi all,

I'm 29yrs old BTW, and am putting in my pension contribution for the year which will be about €7k

I can spread the €7k as follows
International Fund (High Risk) Direct investments into shares quoted on overseas stock markets for long term growth.
KBC Managed Fund (Medium/High Risk) They aim to achieve above average growth over the longer term. Investments may be in Irish and overseas quoted equities, fixed-interest securities, property or cash.
KBC PassiveManaged Fund (Medium/High Risk) Invested 60% in Barclays Global Investors Limited which is a Passive Fund and 40% in KBC as an Active Managed Fund. Passive element will be invested in selected global markets tracking the index and reduce the risk of the fund
KBC Diversity Fund (Low/Medium Risk) Objective of fund is to achieve 6- 8% growth per annum over five years with less dependency on equities and a greater spread risk.
Cash Fund (Low Risk) Mainly invested in Bond and other Fixed Interest Securities.

any advice on what way to spread it don't know too much about it

thanks

homer911

Wow! Congratulations on being able to afford a pension contribution of this size.

The general advice is that low risk funds are for those nearing retirement (say within the next five years) who are looking to avoid a sudden shock to their pension fund

As you are younger, you afford to take a bit more risk. One might also argue that stock markets are still generally depressed and the upside is far greater than the downside risk, so a high risk investment may be worth considering. The other option of course is not to put all your eggs in one basket...

This doesnt sound like a company pension scheme if you are putting in a lump sum - have you spoken to a professional pension adviser?

This is your money - you need to make it your business to learn as much as you feel necessary about it

aidanki

homer911 wrote: »

This is your money - you need to make it your business to learn as much as you feel necessary about it

I am putting in as much as I can this year due to upcoming tax change

where is a good place to start learning about this type of thing

Wudyaquit

One point on this - Cash funds are no longer necessarily the safe bet they were considered a couple of years ago if they're investing in bonds as you've mentioned.
If you want to compare different funds, morningstar do a summary of all major funds e.g. http://quicktake.morningstar.com/FundFamily/Snapshot.asp?symbol=81909&country=USA.
Gives a more objective view of each fund than the funds' own websites.
Within the funds you've listed there may be overlaps so you mightn't be as well diversified as you might think - this summarises where the investments are put (regions and sectors).

Woud agree with Homer on taking on slightly higher risk at your stage, but there's no quick fix on finding out what to go with unfortunately. Plenty of relevant topics, and good sites listed in the stickies on this forum.

alejandro1977

aidanki wrote: »

any advice on what way to spread it don't know too much about it

thanks

you should look at the costs and charges; quite often any gains will be eaten up by management fees; the thing is the fees will be charged regardless of performance.

Ask your pension advisor how much of your contribution s/he is getting; ask why you have a choice of so few funds and ask why s/he hasn't given you a low cost index tracking fund.

There's a lot of randomness in performance of managed funds; unfortunately you end up paying regardless