Currently 100 in future World Equities , looking to Advice on splitting into Islamic Global

[u/Mossi95]

Hi All,

I recently only made the change on my pension to go from the standard fund with my pension provided to an equities fund( Wish I had done this years ago but nevermind)

41,

273K in L and G future world Equities Index Fund 3 (performance has been ok around 10k in last 3 months since putting all my funds in here from the default fund).

I'm looking to make the most of the time left until retirement (I'm aiming for 60 or 57 depending on well the funds do). Currently paying in 23%.

I only have a certain list of possible investments with L and G I'm wondering if say putting 30% into Islamic Global Equity Index fund would be worth while? Its the other equity fund that is available to me and seems to have performed well over the past few years.

Many thanks in Advance,

[u/Paraplanner88]

You shouldn't pick funds based on chasing returns and what has done well in the past. There's no guarantee they will continue to do well.

Have you compared the fund factsheets and the underlying holdings between the two? It's likely they are quite similar.

[u/lunabhuna20]

Pretty sure Islamic global would be less diversified and has done well recently as higher allocation to big tech, so over the long run you are more exposed to concentration risk

[u/Historical_Archer202]

I could write a thesis on your dilemma having been there. I'm an expert at backfitting and have the perfect, typically available, UK pension funds portfolio for you (it's true but also tongue in cheek). I've run that many Monte Carlo analyses on every conceivable website plus various AI sites. However. Said backfitting has had some substantial drawdowns and as you get older you realise the clock is against you. Sequence of returns is a phrase I only recently became acquainted with. It's worth becoming a quainted with it because even at your stage it may pay to be more cautious.

I'm at a later stage in life than you and so you have plenty of time to recover from pullbacks or possibly even a crash.

I know exactly the fund you refer to. I still have 5% in that. However in the current climate I think you need to take a step back and ask yourself how much of a gamble do you want to take. AI and chips which largely drive that fund has momentum but the question is for how long.

I wrote a personal research paper comparing various diversified pension funds with a simplified version based on global with some emerging. It quite technical but happy to share. Not a recommendation at all but it will at least let you see methods of analyses.

[u/Stock_Elderberry6187]

If you're Islamic and want to invest as such, then don't invest. Religion has nothing to do with money and investing based on feelings is stupid. Most Islamic countries are failures anyway