Help choosing pension fund- Active or Passive

[rynos80]

Hi All,

Please what would your view be of choosing between passive fund or active fund besides the management cost?

Is this a better idea to have 100% global equity allocation in either active or passive fund, or allocate 80/20 or 70/30 equity in active and passive management for a 40 year old with 25 years work left before retirement. Again, I know there is no once size fits all in all cases, I would appreciate people's own opinion.

ACTIVE GLOBAL EQUITY PARTIAL HEDGE (Annual Management Charge)-0.95%
Period 7yrs(%), 5yrs(%), 3yrs(%) 2yrs(%) 1yr(%) YTD(%) 3Mo(%)
Actual Return* -- 7.7 7.4 6.9 5.4 -3.7 20.0
Benchmark -- 6.3 6.3 5.1 3.2 -5.8 17.2

PASSIVE GLOBAL EQUITY PARTIAL HEDGE (Annual Management Charge) -0.4%
Period 7yrs(%), 5yrs(%), 3yrs(%) 2yrs(%) 1yr(%) YTD(%) 3Mo(%)
Actual Return* -- 6.1 5.9 4.5 2.5 -6.4 17.0
Benchmark -- 6.1 6.0 4.6 2.7 -6.2 17.1

Thanks

 

[giddings]

I'm no expert but the returns on that actively managed option seem pretty unimpressive.

That said, the net return on the active option is better. E.g. 6.75% over seven years (7.7 - 0.95) vs. 5.7% (6.1 - 0.4).

Not sure why you'd do a split like that (e.g. 70/30) across active and passive. That distribution is usually for different types of assets?