Jupiter Unit Trust Managers Limited has launched an attack on traditional managed pension funds, lambasting their poor performance and lack of courage to deviate from each other and their respective indices.
• Personal pension investors need active fund management
• Jupiter SIPP offers investment diversity and potential for outperformance
Jupiter Unit Trust Managers Limited has launched an attack on traditional managed pension funds, lambasting their poor performance and lack of courage to deviate from each other and their respective indices.
Drawing on research, which demonstrates the poor performance of some of the largest life company managed funds, each holding more than a billion pounds of pension investors' money, Jupiter called for these 'managed' funds to begin investing people's money with a view to active outperformance, and for personal pension investors to consider their pension as an investment.
Five-year performance of the largest three life company managed funds | |
Fund | 5-year return (%) |
| Scottish Equitable Mixed | -20 |
| Standard Life Managed | -18 |
| Sun Life Managed | -17 |
| Average Managed Pension | -12 |
Source: S&P Micropal, 01.10.97 – 01.10.02. Offer to bid, UK Pension,Based in UK Sterling, Calculation Indexed
Colin Maloney, Pension Development Director at Jupiter, said, "The major life offices have for too long dominated the investment of personal pension funds, and this has led to widespread complacency and lack of appetite to seek outperformance. During the long bull market of the 80s and 90s everyone made money, but the past few years have exposed the big managed pension funds as index huggers. Investors are starting to question their performance."
Jupiter's research also highlights the close correlation between the asset allocations of the UK's largest life office managed pension funds. The table below compares the largest three by their bonds, UK equities and overseas equities exposure.
Asset Allocation of largest three life company managed funds | |||
Scottish Equitable Mixed (%) | Standard Life Managed (%) | Sun Life Managed (%) | |
| Bonds | 17.3 | 15.4 | 13.2 |
| UK equities | 52.5 | 53.3 | 54.7 |
| Overseas equities | 21.2 | 22.4 | 21.9 |
With life company difficulties falling increasingly under the spotlight, and poor performance driving down the value of investors' pension pots, Jupiter expects investment into self-invested personal pensions (SIPPs) to surge over the next five to ten years, as IFAs re-channel their clients' retirement savings into actively managed funds.
Maloney continued, "We want to explode the myth that life companies are for pensions and investment houses are for ISAs. Both ISAs and pensions are simply tax-efficient wrappers around what is by far the most important factor, the investment portfolio itself. SIPPs offer access to a diversity of investments, everything from collective funds to commercial property, thus enabling the construction of a balanced retirement portfolio*. Plus, with a genuinely active fund manager like Jupiter, pension investors give themselves the opportunity to outperform the markets and build up a comfortable retirement nest-egg."
The SIPPs market is already two thirds the size of the ISA market, representing £14bn of investors' money, however Jupiter is predicting further dramatic growth over the coming years.
Launched last year, the Jupiter SIPP offers price-competitive access to some of the best investment talent in the UK.
Jupiter Unit Trust Managers offers 28 retail unit trusts, with a core focus on UK and Europe. Investing in this range of funds can provide access to its leading fund of funds team as well as its two 'green' unit trusts which are researched by its long-established Environmental Research Unit. The funds are also available for investment within the Jupiter SIPP and the Jupiter Group provides private client services.
For further information please contact: Jupiter Broker Support Desk Jupiter Unit Trust Managers Ltd Tel: 020 7314 7699
Email: [email protected]
Website: www.jupiterifa.co.uk
