More funds does not always mean a better pension
Some people need only one well-diversified pension fund. Others may use several funds to combine growth, stability, regions or investment styles.
The number matters less than the purpose. If each fund has a clear role, multiple funds can make sense. If several funds all do the same thing, the pension may become messy without becoming better.
Owning too many funds can make it harder to understand your actual risk. You may think you are diversified, but many funds may hold similar underlying investments.
A simple pension portfolio is often easier to review and maintain. Complexity should earn its place.
Useful questions
- What job does each fund do?
- Do the funds overlap heavily?
- Can you explain the overall risk level?
- Are charges higher because of complexity?
- Would one diversified fund do the job?