Important information
What you do with your pension is an important decision. You should check you're making the right decision for your circumstances and that you understand all your options and their risks.
The government's free and impartial Pension Wise service can help you and we can offer you advice if you’d like it. This isn’t personal advice, you can ask us for advice if you’re not sure which investments are right for you. All investments can fall as well as rise in value so you may not get back what you invest.
Hal Cook, Senior Investment Analyst
Published on 2 November 2023
If you’re looking for answers on where to invest, these ideas from our research team could be a good place to start.
We’ve picked a variety of funds which could be of interest depending on where you are in your retirement journey. Retirement could be a long way away, in the next few years, or you could already be retired.
You could hold these in a Self-invested personal pension (SIPP), but other investment accounts like an ISA can form part of your retirement plans and you could also hold these funds in other accounts.
These funds shouldn’t be considered as standalone investments but could form part of a wider investment portfolio. There’s a tiered annual charge to hold funds within an HL account, with a maximum charge of just 0.45% per year.
Find out more about fund charges
The funds have their own charges which will differ depending on what you choose. These charges will be shown on the fund’s factsheet.
Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made.
You should understand the specific risks of a fund before you invest, and make sure any new investment forms part of a diversified portfolio.
This isn’t personal advice. You should choose investments based on your own preference, attitude to risk and research. You can ask us for advice if you’re not sure which investments are right for you.
All investments can fall as well as rise in value so you may not get back what you invest.
HL READY-MADE PENSION PLAN
A new investment solution which will make starting a pension even easier.
Investing for retirement
When investing for retirement many people are looking to grow their money over time. We think these funds offer growth potential, but remember investments can fall as well as rise in value, so you could get back less than you invest.
L&G Future World ESG Developed Index
Responsible investment funds give you the chance to make money in a way that’s in line with your principles. Some avoid investing in areas that do harm, like tobacco producers, weapons manufacturers or alcoholic drinks makers. Others invest in companies that have a positive effect on society – from those that treat their employees well, to those that create clean energy through wind farms or solar panels.
This fund invests in broad developed stock markets while being mindful of environmental, social and governance (ESG) issues. It aims to track the performance of the Solactive L&G ESG Developed Markets Index. It won’t invest in tobacco companies, pure coal producers, makers of controversial weapons or persistent violators of the UN Global Compact Principles.
It provides exposure to over 1,400 large companies around the world, with much of the fund invested in companies based in the US and Europe (including the UK). As this is an index tracker fund, performance is not dependent on the skill of the manager’s stock picking. This means you are not subject to a particular managers style or investment preferences, or the swings in performance that these can produce.
As it only invests in company shares though, performance can be volatile at times, meaning you should look to invest in it for the long term. While the fund mainly invests in large companies, it does sometimes invest in smaller companies and use derivatives, both of which add risk.
An index tracker fund is one of the simplest ways to invest, and this one could be a good addition to a broader investment portfolio aiming to deliver long-term growth in a responsible way.
JPM Emerging Markets
There’s no place quite as diverse as the emerging markets. From big Asian countries like China and India, to Brazil and Mexico in South America, these countries offer a lot of potential as part of a portfolio for investors looking for long-term growth opportunities. But it could take time for them to fully develop, so the risks are greater and higher levels of volatility should be expected. A longer investment outlook is essential.
This fund invests in a broad spread of companies based across emerging countries, including China, India, Brazil, South Africa and Taiwan. As an actively managed fund, it aims to outperform the broader emerging stock market. While we think it has potential to do this over the long term, there are likely to be shorter time periods where the fund will underperform. Because of the large universe of potential companies within emerging markets, we think funds that are actively managed have a better chance to outperform compared to some smaller or more developed areas of global stock markets.
The managers aim for the fund to perform better than the broader emerging stock market by investing in high-quality companies that they believe can sustain earnings growth over the long term. They believe most investors underestimate the potential for share price growth in companies that can grow their earnings at a sustainable pace over a long period of time. This could help them buy company shares at a reasonable price and hold on to them as they grow their profits, and hopefully their share prices, over the long run. The process is considered to be ‘growth’ focused.
Investing in emerging markets is a way of adding diversification to a portfolio, or other global equity funds, which typically have a greater focus on the US and Europe (including the UK).
BNY Mellon Multi-Asset Balanced
Mixed asset funds normally invest in a mix of different investments including shares, bonds, commodities, property and currencies. Each one is slightly different, but the principle is the same, a greater level of diversification should mean fewer ups and downs for an investment over time.
Investing in mixed asset funds that have a large weighting to company shares can result in higher returns over the long term compared to those funds which have a greater allocation to bonds or other asset classes.
While you may not achieve the same level of return over the long term as you would if you invested in a fund focused on company shares, the additional diversification and lower volatility make mixed asset funds a great starting point for a portfolio. The level of diversification also means that these funds could be used as a core holding within a portfolio, with potentially a significant proportion of investments allocated to them.
This fund likes to keep things simple, usually investing in a combination of shares, bonds and cash. Most of the fund is invested in shares though, with typically 70-80% of the fund invested there.
The manager favours the shares of established companies with competitive advantages, that often pay a dividend. While there's no income target for the fund, the manager likes companies that pay a dividend because of the discipline that this puts on company management teams. This usually leads him to favour large, established businesses, that are cash generative and don't have lots of debt.
This also means that most of the fund will typically be invested in companies based in developed countries such as the US or Europe (including the UK). While the fund has the option to invest in corporate bonds, the manager prefers to hold government bonds from countries like the US or the UK instead. This is because it is very unlikely that these governments will default on their bond payments.
The fund can invest in high yield bonds, emerging market companies, smaller companies and use derivatives, all of which add risk.
Nearing retirement
As you get closer to retirement your investment strategy may need to change. Some investors may wish to take a less risky approach as they look to start taking an income or buy an annuity by preserving their capital. Others may still look for growth if they don’t plan on taking income.
Income from investments is variable and not guaranteed.
Troy Trojan
Investing in a number of different companies isn’t the only way to diversify a portfolio. Different investment types could help too.
Total return funds could be a good choice as a balanced option because they’re more conservative. They normally hold a mix of shares, bonds, commodities, property and currencies. This could offer modest growth over the long term and help shelter money when stock markets fall. But they aren’t likely to keep up with stock markets when they rise quickly.
Troy Trojan is run by experienced fund manager Sebastian Lyon. Part of the fund invests in shares of well-established companies in countries like the US and UK and some smaller companies too, which can be more volatile. The rest invests in UK government bonds and US inflation-linked bonds, which could provide some shelter from rising inflation. It also holds gold and cash, which can help offer some stability when times are tough in the economy and stock markets.
Overall, the fund holds a small number of investments. This means each one can have a meaningful impact on the performance, but it does add risk.
The fund could form part of the foundation of a broad investment portfolio, bring some stability to a more adventurous portfolio, or provide some long-term growth potential to a more conservative portfolio.
Schroder Managed Balanced
Mixed asset funds normally invest in a mix of different investments including shares, bonds, commodities, property and currencies. Each one is slightly different, but the principle is the same, a greater level of diversification should mean fewer ups and downs for the investment over time.
Investing in mixed asset funds that have a large weighting to company shares usually results in higher returns over the long term compared to those funds which have a greater allocation to bonds or other asset classes.
While you may not achieve the same level of return over the long term as you would if you invested in a fund focused on company shares, the additional diversification and lower volatility make mixed asset funds a great starting point for a portfolio. The level of diversification also means that these funds could be used as a core holding within a portfolio, with potentially a significant proportion of investments allocated to them.
This fund mainly invests in funds run by other managers at Schroders and provides exposure to a broad range of assets including global shares and bonds. This makes the fund highly diversified.
The managers tend to favour shares when the economic environment is positive. But in times of stress, they shift to more diversified assets, such as bonds and cash, aiming to minimise losses.
The managers have the option to invest in high yield bonds and derivatives, which adds risk.
We think this fund could form the core of a broader portfolio aiming to deliver long-term growth or add some stability to a portfolio mostly invested in shares.
This fund holds shares in Hargreaves Lansdown plc.
L&G Future World ESG Developed Index
Responsible investment funds give you the chance to make money in a way that’s in line with your principles. Some avoid investing in areas that do harm, like tobacco producers, weapons manufacturers or alcoholic drinks makers. Others invest in companies that have a positive effect on society – from those that treat their employees well, to those that create clean energy through wind farms or solar panels.
This fund invests in broad developed stock markets while being mindful of environmental, social and governance (ESG) issues. It aims to track the performance of the Solactive L&G ESG Developed Markets Index. It won’t invest in tobacco companies, pure coal producers, makers of controversial weapons or persistent violators of the UN Global Compact Principles.
It provides exposure to over 1,400 large companies around the world, with much of the fund invested in companies based in the US and Europe (including the UK). As this is an index tracker fund, performance is not dependent on the skill of the manager’s stock picking. This means you are not subject to a particular managers style or investment preferences, or the swings in performance that these can produce.
As it only invests in company shares though, performance can be volatile at times, meaning you should look to invest in it for the long term. While the fund mainly invests in large companies, it does sometimes invest in smaller companies and use derivatives, both of which add risk.
An index tracker fund is one of the simplest ways to invest, and this one could be a good addition to a broader investment portfolio aiming to deliver long-term growth in a responsible way.
In retirement
In retirement, investors may wish to take an income from their investments while looking for conservative growth. These investments have been chosen for their income potential.
Income from investments is variable and not guaranteed.
Royal London Corporate Bond
Investment grade corporate bond funds hold bonds issued by companies at the higher end of the credit quality spectrum, meaning these are companies that are more likely to be able to repay their debts to bondholders. As such, they tend to offer lower yields than bonds issued by companies that are less likely to be able to pay off their debts. While they tend to offer lower yields than bonds issued by higher-risk companies, prices of these bonds tend to be less volatile over time. We think a corporate bond fund could be a good addition to a diversified portfolio invested to generate income.
The managers of this fund search for bonds that they believe other investors have misunderstood. Often, they'll be perceived as too risky. But with some extra analysis the Royal London team can often be confident there are sufficient rewards on offer for the risks being taken. They typically take a long-term view, with the aim to exploit inefficiencies and find undervalued opportunities.
We rate Shalin Shah and the bond team at Royal London highly. They're prepared to invest in parts of the bond market a lot of other investors ignore. While their additional research throws up opportunities to boost returns, these can add risk, so we view this as a more adventurous corporate bond fund. It could offer a slightly higher yield and greater long-term performance potential, but there are no guarantees.
We think it's a great option for portfolios looking to invest in corporate bonds and are prepared to accept a little more volatility for what we see as excellent long-term potential.
This fund takes its charges from capital which can increase the yield but reduces the potential for capital growth.
Troy Trojan
Investing in a number of different companies isn’t the only way to diversify a portfolio. Different investment types could help too.
Total return funds could be a good choice as a balanced option because they’re more conservative. They normally hold a mix of shares, bonds, commodities, property and currencies. This could offer modest growth over the long term and help shelter money when stock markets fall. But they aren’t likely to keep up with stock markets when they rise quickly.
Troy Trojan is run by experienced fund manager Sebastian Lyon. Part of the fund invests in shares of well-established companies in countries like the US and UK and some smaller companies too, which can be more volatile. The rest invests in UK government bonds and US inflation-linked bonds, which could provide some shelter from rising inflation. It also holds gold and cash, which can help offer some stability when times are tough in the economy and stock markets.
Overall, the fund holds a small number of investments. This means each one can have a meaningful impact on the performance, but it does add risk.
The fund could form part of the foundation of a broad investment portfolio, bring some stability to a more adventurous portfolio, or provide some long-term growth potential to a more conservative portfolio.
Artemis Income
UK equity income funds are a convenient way to invest in a mix of dividend-paying UK companies, and to access one of the highest-yielding stock markets in the world. An equity income fund can be a great addition to a portfolio for different reasons. You can take the pay-outs to supplement your income and have a bit of extra cash in your back pocket. Or if you’re targeting growth and aiming to build your portfolio for longer, reinvesting dividends can help grow your pot thanks to the beneficial effect of compounding.
The managers aim to outperform the FTSE All-Share over the long term while providing a growing income and a dividend yield above what’s offered by the index. This means the management trio look for businesses they believe can pay a stable and sustainable level of income, through the market cycle, regardless of the economic backdrop. The team says there is a ‘competition for capital’ in the portfolio, and only their best ideas make it into the fund. They seek companies with reoccurring revenues which they believe will still have consumers, profits, and therefore dividends, in the future, regardless of disruption – although nothing is guaranteed.
We think the fund could help form part of the foundation of an income portfolio, diversify a broader global portfolio, or diversify the income paid by bond funds or a global equity income fund.
The fund takes its charges from capital, which can increase the yield, but reduces the potential for capital growth.
Baillie Gifford Sustainable Income
Mixed asset funds normally invest in a mix of different investments including shares, bonds, commodities, property and currencies. Each one is slightly different, but the principle is the same, a greater level of diversification should mean fewer ups and downs for an investment over time.
Investing in mixed asset funds that have a large weighting to company shares usually results in higher returns over the long term compared to those funds which have a greater allocation to bonds or other asset classes although past performance is not a guide to the future.
While you may not achieve the same level of return over the long term as you would if you invested in a fund focused on company shares, the additional diversification and lower volatility make mixed asset funds a great starting point for a portfolio. The level of diversification also means that these funds could be used as a core holding within a portfolio, with potentially a significant proportion of investments allocated to them.
This fund invests across three broad investment areas: shares, property/infrastructure and bonds. The aim of the fund is to increase the distribution paid to investors by more than the increase in the consumer prices index, over the long term. This means the fund is focused on providing a resilient income over time. While the income provided by this fund may not be the highest available, there is a focus on income across everything that it invests in, which means the income could be more consistent.
The long-term asset allocation is an equal split of the three areas noted above, but the property/infrastructure section is accessed through listed companies. This means most of the fund is invested in shares. This fund is one of Baillie Gifford’s sustainably labelled funds, meaning that environmental, social and governance (ESG) considerations are a meaningful part of how they assess investments for it.
The fund takes its charges from capital, which can increase the yield, but reduces the potential for capital growth.
The fund can invest in emerging market companies and use derivatives, which add risk.
We think this fund could be used to provide diversification to a portfolio focused on growth or be a useful addition to a portfolio focused on income provision.
This fund doesn’t currently feature on the Wealth Shortlist.
This fund holds shares in Hargreaves Lansdown plc.
Important information
What you do with your pension is an important decision. You should check you're making the right decision for your circumstances and that you understand all your options and their risks.
The government's free and impartial Pension Wise service can help you and we can offer you advice if you’d like it. This isn’t personal advice, you can ask us for advice if you’re not sure which investments are right for you. All investments can fall as well as rise in value so you may not get back what you invest.