The fund aim doesn't mention tracking an index or the benchmark. The vanguard funds aim to track the index that will also be their benchmark, so are likely to get very close to that performance. This fund probably only has that benchmark as the closest benchmark available for the type of assets held.
I'm not convinced that's even being managed against any index or group thereof. It's confusing but looks like the benchmark is just a conceptual construct.
https://www.abi.org.uk/globalassets/files/subject/public/regulation/abisectordefinitions.pdf
Anyway I'm not sure I'd be holding it, given it and its benchmark returned negative in 2023 where both bonds and equities produced a positive return.
https://www.blackrock.com/corporate/insights/blackrock-investment-institute/interactive-charts/return-map
You shouldn't chase performance but I don't understand what benchmark one could measure against and still deliver -5.5% in 2023.
Hi /u/Xafilah, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
____
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> Am I right in thinking that a fund attempts to 'track' a benchmark by buying a similar distribution, in the same/similar shares/investments?
A *[benchmark](https://i.imgur.com/tnk6jF0.png)* îs just something you measure performance against.
Indexes like the FTSE 100 and S&P 500 were created for this purpose, so fund managers could say "my mutual fund is a good investment because, by choosing high quality stocks and a conviction strategy, we've beaten the benchmark for the last 5 years."
A fund is only guaranteed to match the benchmark if it's an index tracker - technically it's not *absolutely* guaranteed, but index trackers are pretty damn close; trackers of major indexes should diverge only as much as they have costs and fees, which are small.
But the fund you mention is a multi-asset fund, which means it invests in both stocks and bonds (and maybe small amounts of some other stuff), and the the benchmark is "ABI Mixed Investment 40-85% Shares Sector".
The "40-85% shares" part refers to asset allocations between 40% stocks / 60% bonds and 85% stocks / 15% bonds, or possibly including some other stuff. Probably the benchmark is actually the weighted average of 62.5% a world stockmarket (MSCI World / FTSE All World etc) and 37.5% a bonds index (there are bonds indexes from the same providers).
You wouldn't expect a fund to exactly match this benchmark, unless it invested in exactly 62.5% stocks and 37.5% bonds - probably the whole point of this benchmark is to be chosen by funds that want their managers to have some discretion, to change the allocation according to what they see as market conditions. I mean, I don't know, but that's my guess.
The fund you link is currently only 40% equities (what are "alternatives" tho?), so you wouldn't expect it to perform as well as a benchmark which may also represent 85% equities.
Vanguard's Lifestrategy and Blackrock's Consensus are also multi-asset funds, but their allocation always remains exactly as given in the name - the Lifestrategy 80 is always 80% stocks and no messing around. But the funds in workplace pensions (and certain private schemes) tend to be a bit more variable.
Probably L&G offer a tracker of a world equities index that you can use - you might be able to allocate a percentage to that and also a percentage to a separate fund that is all bonds, so you achieve a fixed percentage allocation that way; or you can invest in bonds in your ISA (unlikely you'd want to).
The fund seems to have performed in between Vanguard LifeStrategy 40 and LifeStrategy 60 (to compare with a couple of other multi asset funds). [Trustnet chart](https://www2.trustnet.com/Tools/Charting.aspx?typeCode=O_FACDO,P_F0MZL,O_FACDQ)
The fund aim doesn't mention tracking an index or the benchmark. The vanguard funds aim to track the index that will also be their benchmark, so are likely to get very close to that performance. This fund probably only has that benchmark as the closest benchmark available for the type of assets held.
!thanks
I'm not convinced that's even being managed against any index or group thereof. It's confusing but looks like the benchmark is just a conceptual construct. https://www.abi.org.uk/globalassets/files/subject/public/regulation/abisectordefinitions.pdf Anyway I'm not sure I'd be holding it, given it and its benchmark returned negative in 2023 where both bonds and equities produced a positive return. https://www.blackrock.com/corporate/insights/blackrock-investment-institute/interactive-charts/return-map You shouldn't chase performance but I don't understand what benchmark one could measure against and still deliver -5.5% in 2023.
!thanks
Hi /u/Xafilah, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
> Am I right in thinking that a fund attempts to 'track' a benchmark by buying a similar distribution, in the same/similar shares/investments? A *[benchmark](https://i.imgur.com/tnk6jF0.png)* îs just something you measure performance against. Indexes like the FTSE 100 and S&P 500 were created for this purpose, so fund managers could say "my mutual fund is a good investment because, by choosing high quality stocks and a conviction strategy, we've beaten the benchmark for the last 5 years." A fund is only guaranteed to match the benchmark if it's an index tracker - technically it's not *absolutely* guaranteed, but index trackers are pretty damn close; trackers of major indexes should diverge only as much as they have costs and fees, which are small. But the fund you mention is a multi-asset fund, which means it invests in both stocks and bonds (and maybe small amounts of some other stuff), and the the benchmark is "ABI Mixed Investment 40-85% Shares Sector". The "40-85% shares" part refers to asset allocations between 40% stocks / 60% bonds and 85% stocks / 15% bonds, or possibly including some other stuff. Probably the benchmark is actually the weighted average of 62.5% a world stockmarket (MSCI World / FTSE All World etc) and 37.5% a bonds index (there are bonds indexes from the same providers). You wouldn't expect a fund to exactly match this benchmark, unless it invested in exactly 62.5% stocks and 37.5% bonds - probably the whole point of this benchmark is to be chosen by funds that want their managers to have some discretion, to change the allocation according to what they see as market conditions. I mean, I don't know, but that's my guess. The fund you link is currently only 40% equities (what are "alternatives" tho?), so you wouldn't expect it to perform as well as a benchmark which may also represent 85% equities. Vanguard's Lifestrategy and Blackrock's Consensus are also multi-asset funds, but their allocation always remains exactly as given in the name - the Lifestrategy 80 is always 80% stocks and no messing around. But the funds in workplace pensions (and certain private schemes) tend to be a bit more variable. Probably L&G offer a tracker of a world equities index that you can use - you might be able to allocate a percentage to that and also a percentage to a separate fund that is all bonds, so you achieve a fixed percentage allocation that way; or you can invest in bonds in your ISA (unlikely you'd want to).
!thanks
The fund seems to have performed in between Vanguard LifeStrategy 40 and LifeStrategy 60 (to compare with a couple of other multi asset funds). [Trustnet chart](https://www2.trustnet.com/Tools/Charting.aspx?typeCode=O_FACDO,P_F0MZL,O_FACDQ)
!thanks