DC Pension - best investment option to choose - long term

S

Springers

Registered User
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Hi,

I'm 42 and need to choose the best investment option for long term:


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Not sure which one to choose between the highest Risk Rating options.

Passive Global Equity Partial Hedge and Passive Sustainable Global Equity have the lowest AMC and highest risk rating.

I'd like to get the better return in at least 20 years time. What would be the difference between these 2 Passive Equity options?

Additionally I don't understand how the highest risk rating option (6- Aspire High Growth Portfolio) can have such a high AMC value (0.28%).

Thanks.
 
Springers said:
I don't understand how the highest risk rating option (6- Aspire High Growth Portfolio) can have such a high AMC value (0.28%).
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The passive funds just track the indices. They don't require a huge amount of expensive staff to do that.

The more expensive funds are actively managed. That means that they have investment analysts and others researching, buying and selling shares. So this pushes up the AMC.

Brendan
 
Thanks Brendan,

A difference of 0.16% in AMC seems huge to me to have investment analysts working on the fund (are they trying to time the market?).

I'll go for one of the two Passive Global Equity then.
 
Does the AMC come out of the employee's fund directly, or is it paid separately by the employer?
 
Lisboa said:
Does the AMC come out of the employee's fund directly, or is it paid separately by the employer?
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It comes in the form of a reduced investment performance. So if the underlying assets grew by 5% in a year and the AMC was say 1%, then the unit price will show a 4% growth. That's the simple explanation.
 
Conan said:
It comes in the form of a reduced investment performance. So if the underlying assets grew by 5% in a year and the AMC was say 1%, then the unit price will show a 4% growth. That's the simple explanation.
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That doesn't sound correct. The AMC is charged on the full value of the fund whether it grows it not. Say my pension fund is worth €500k, the AMC is 1%, and there is zero growth in a year, then then the charge for that year is €5k reducing my fund to €495k.
 
ClubMan said:
That doesn't sound correct. The AMC is charged on the full value of the fund whether it grows it not. Say my pension fund is worth €500k, the AMC is 1%, and there is zero growth in a year, then then the charge for that year is €5k reducing my fund to €495k.
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Isn't it the same as Conan mentioned with other words? In this case, assets grow by 0% in a year with AMC 1%, then the unit price will show a -1% growth (or 1% fall) as Conan mentioned. Would you please elaborate? I think I'm missing something.
 
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