This is part of our quarterly plan performance series. Catch up on last quarter’s summary here: How PensionBee’s plans are performing.
Global inflation has concerned investors throughout 2023. There’s a growing sense that central banks are struggling to get it under control fast enough. This has led to turbulence in the bond markets, with inflation-linked gilts and UK gilts suffering.
Across the Atlantic Ocean, the US stock market’s been flourishing. With the ‘AI gold rush’ underway, the S&P 500 Index rose almost 16% in the first half of 2023. Yet, this growth is primarily driven by just seven technology companies.
Despite these challenges, there’s an overarching theme of optimism. The pound sterling has been strengthening against the US dollar and there’s even a renewed interest in the UK economy.
Keep reading to find out how global markets and our PensionBee plans have performed over 2023 so far.
This blog’s only meant to provide information. The data comes from our money managers or plan factsheets. Performance figures are before fees and after taxes. Past performance isn’t an indicator of what will happen in the future. As with all investments, capital is at risk.
Company shares in Q2 2023
What are company shares?
Company shares are units of ownership in a company. When a company wants to raise money, it can issue shares to investors who pay a certain amount of money for each share. By buying shares, investors become part-owners of the company and can enjoy its profits or growth. But, they also take on the risk of losing money if the company performs poorly or goes bankrupt. Company shares are also known as stocks or equities, and they’re commonly traded on stock markets.
Global stock markets
Global stock markets were hit hard in 2022, but are slowly recovering in 2023. The performance of company shares has been mixed. Technology and healthcare companies have done well, as these sectors have benefited from artificial intelligence and ongoing demand for products and services. Energy and financial companies have struggled to keep up, as these sectors have been impacted by rising inflation and interest rates.
| Index | Investment location | Performance over H1 2023 (%) | Equity proportion (%) |
|---|---|---|---|
| FTSE 250 Index | UK | -2.3% | 100% |
| S&P 500 Index | North America | +15.9% | 100% |
Source: BBC Market Data
PensionBee’s equity plans
| Plan | Money manager | Performance over H1 2023 (%) | Equity proportion (%) |
|---|---|---|---|
| Impact Plan | BlackRock | -1.4% ^ | 100% |
| Fossil Fuel Free Plan | Legal & General | +9.4% | 100% |
| Shariah Plan | HSBC (traded via State Street Global Advisors) | +18.7% | 100% |
| Tailored (Vintage 2061 - 2063) Plan | BlackRock | +9.8% | 100% |
| Tailored (Vintage 2055 - 2057) Plan | BlackRock | +9.8% | 100% |
| Tailored (Vintage 2049 - 2051) Plan | BlackRock | +9.2% | 96% |
| Tailored (Vintage 2043 - 2045) Plan | BlackRock | +8.1% | 85% |
| Tracker Plan | State Street Global Advisors | +9.0% | 79% |
| Tailored (Vintage 2037 - 2039) Plan | BlackRock | +6.6% | 72% |
| Tailored (Vintage 2031 - 2033) Plan | BlackRock | +5.4% | 59% |
| 4Plus Plan | State Street Global Advisors | +5.0% | 52% ^^ |
^ 3 month returns as the Impact Plan launched on 15 February 2023 and full H1 data isn’t available.
^^ Equity % at 30 June 2023, as changes on a weekly basis due to actively managed components.
Investment performance is taken from money manager factsheets. To view the factsheets, please visit our Plans page. All performance is reported in gross figures and may not take account of fees associated with certain investments. Past performance is not an indicator of future performance. Capital at risk.
Equity content refers to the amount of exposure each plan has to global stock markets and other listed risk-on assets, such as property and commodities.
Bonds in Q2 2023
What are bonds?
Bonds are a type of investment where you lend money to an organisation, like a government or company. In return, they agree to pay you back with interest over a period of time. Bond yield’s the annual return that an investor gets from a bond. Bonds are considered to be lower risk than company shares, because you usually know how much money you’ll get back. This makes them a good option for people who are approaching retirement and need a steady stream of income. Bonds are also known as fixed-income securities.
Global bond markets
Global bond markets had a tough year in 2022, but they’re expected to recover in 2023. Central banks around the world have raised interest rates in an effort to combat inflation. This has led to higher yields on government bonds, as well as on corporate and other types of bonds. As interest rates rise, bond prices often fall. So far this year, bond prices have held up relatively well, even as yields have risen.
| Fund | Source | Performance over H1 2023 (%) | Fixed-income proportion (%) |
|---|---|---|---|
| Schroder Long Dated Corporate Bond Fund | Morningstar | -2.2% | 100% |
Source: Morningstar
PensionBee’s fixed-income plans
| Plan | Money manager | Performance over H1 2023 (%) | Fixed-income proportion (%) |
|---|---|---|---|
| Preserve Plan | State Street Global Advisors | +2.0% | 100% |
| Pre-Annuity Plan | State Street Global Advisors | -1.6% | 99% |
| Tailored (LifePath Flexi) Plan | BlackRock | +3.6% | 60% |
| Tailored (Vintage 2025 - 2027) Plan | BlackRock | +4.3% | 51% |
Investment performance is taken from money manager factsheets. To view the factsheets, please visit our Plans page. All performance is reported in gross figures and may not take account of fees associated with certain investments. Past performance is not an indicator of future performance. Capital at risk.
Summary
You may find yourself rethinking your pension savings during the cost of living crisis. Or worrying about whether you’re making the right choices. PensionBee customers can have peace of mind knowing that our pension plans are being managed by some of the world’s biggest money managers. Again, it’s worth remembering that it’s normal and expected for pensions to go up and down in value over time.
This is part of our quarterly plan performance series. Check out the next quarter’s summary here: How PensionBee’s plans are performing in 2023 (as at Q3).
Have a question? Get in touch!
You can check out our Plans page to learn how your money is invested in different assets and locations. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
