There is no better way to save for retirement than by investing in a pension fund. However, with hundreds of funds available, choosing the right one is as complicated as ever.
This is problematic, as being in the wrong fund can be catastrophic for your retirement savings.
Unfortunately, there are tens of thousands of people who are contributing considerable portions of their salaries into pension funds that have been underperforming for many years.
So which funds have been performing well, and which haven’t? To find out, we analysed the best and worst performing funds over the past five years by looking at the latest performance data from each of Ireland’s five main pension providers.
There were some interesting trends in the analysis – including the similarities between the funds with the highest and lowest growth over five years.
Most of the top performers were high equity funds with risk ratings of 5 or 6, while the worst performing funds were often those with portfolios made up of bonds or property, much lower down on the volatility scale.
This is notable as many people may have assumed that the funds which recorded negative growth were the safest, as they are made up of what appear to be safer assets, at least on the surface. This hasn’t been the case over the past five years.
So, with a questionable risk rating system and the changing nature of the best performing funds, seeking expert financial advice has never been more important.
Our analysis also highlights just how critical regular reviewing your pension fund’s performance truly is – even though it’s not the only thing that you must consider when choosing your pension fund.
Thousands of people reach retirement age each year only to find themselves disappointed with their pension pot, because of irregular reviews and ignoring current trends.
Make sure that when it’s your time to retire, you’re not one of them.
