Mercer Passive Over 15 year gilt fund

[terminal7]

My son recently asked me to review his occupational pension fund. The employee chooses the funds - with or without professional help. Most funds in his pot have performed ok against market benchmarks. The above bought in 2018 on the basis of very low risk - like most gilt funds bought before Jan 2022 - has nosedived since and then pushed off the cliff with Truss in October. Fortunately this fund represents under 5% of total pot.

I would be interested with high interest rates now appearing the norm for next 1/2 years whether given the current govt/BoE policy to possibly further increase rates it would be better to close his position? ny general thoughts?

T7

[dealtn]

My son recently asked me to review his occupational pension fund. The employee chooses the funds - with or without professional help. Most funds in his pot have performed ok against market benchmarks. The above bought in 2018 on the basis of very low risk - like most gilt funds bought before Jan 2022 - has nosedived since and then pushed off the cliff with Truss in October. Fortunately this fund represents under 5% of total pot.

I would be interested with high interest rates now appearing the norm for next 1/2 years whether given the current govt/BoE policy to possibly further increase rates it would be better to close his position? ny general thoughts?

T7

Its performance will depend on the relative performance of market interest rates compared to those currently predicted by the forward market interest rate curve. As such it could still outperform from here even with high interest rates for the next 1/2 years. You should familiarise yourself with what the forward curve looks like and judge your expectations against that. You are looking at (presumably) a 15 year gilt duration.

As always looking backwards at past performance shouldn't be the basis of determining asset allocation.