Hi,When I look at the UK pension fund system, I think there is a flaw fundamentally in the term "investing". Pension fund managers always go long which is good only if there is a clear up trend. However in a bearish scenario they still keep going long. Imagine if one day the bullish up trend in the UK / US equity / property market is over, then there is no point to invest in any long equities / corporate bonds / properties pension fund. However all the funds in the list on the pension fund platform is all about long equities / bonds / properties. It means I will see my long term pension fund vapourised and there is nothing I can do about it.Any idea how to go short in pension fund? I am a short term commodities trader so I can go long and go short as well. If I can do it at work why I cannot do it in my pension?Thanks,

pensions are not a trading fund. long term real returns on major asset classes are generally positive - total real returns on equities in real terms probably around 4-6% per annum. Bond probably around 2-3%.

There are many ways to avoid a perceived tsunami. Asset managers can shorten durations, switch underlying credit or use derivatives to alter their fundamental exposures. It really depends on their investment philosophy and mandate.

QuoteOriginally posted by: BankingAnalystHi,When I look at the UK pension fund system, I think there is a flaw fundamentally in the term "investing". Pension fund managers always go long which is good only if there is a clear up trend. However in a bearish scenario they still keep going long. Imagine if one day the bullish up trend in the UK / US equity / property market is over, then there is no point to invest in any long equities / corporate bonds / properties pension fund. However all the funds in the list on the pension fund platform is all about long equities / bonds / properties. It means I will see my long term pension fund vapourised and there is nothing I can do about it.Any idea how to go short in pension fund? I am a short term commodities trader so I can go long and go short as well. If I can do it at work why I cannot do it in my pension?Thanks,I assume that by 'pension fund' you mean a mutual fund. Depends also on the country. In the US you can access pension funds that have short components. In the UK however this is not legal (ASFAIK), so no funds will be anything but long. However you can invest in ETFs which allow you to make short bets. I also dont know what you can and cannot put in a SIP wrapper in the UK, but it might be possible to put short ETFs in there in which case that would be a solution.I also disagree with you anyway. You talk about 'vapourising' a pension pot. Well, if you are short and you are on the wrong side... that really is vapourisation... The point being that there is increased risk in more sophisticated strategies and exactly this motivates the rules. (Not everyone is a commodities trader, so mixing them with long-short/derivative portolio strategies is almost certain to be a complete disaster).A good long only active manager will manage factor exposures to minimise downside risk and maximise upside. So while the fund will undeniably fall if the market falls there should be some intelligence as to how the portfolio is positioned at that time. And the manager should know exactly what risks they are investing in and exactly what risks they wish to minimise.

I agree that pension / mutual fund managers will "try" to do something to maximise my portfolio. However, when I look closely at the chart for the past few years, the fact is that they simply have the shape as the equity / property index. i.e. equity pension fund lost big time 2008 and 2009, then have massive return on 2010 and 2011, then the return gets stable afterwards / slightly up trend. While I look at the equity index (FTSE 100 / DJI) they clearly have the same shape / % of return, so I would suspect something is wrong here as they always have my cash sitting on the equity market while on a down trend they did not even try to hedge the position. So how come I pay them at least 1% as the management fee? This is equivalent to spread bet on IG index and you go and buy the FTSE 100 and sit there for your life (will you do it? I doubt, but the fund managers are doing it now) For me I do prop trade at work. I made money and the pnl comes from someone else - i.e. someone should be losing consistently. It is always a zero / negative sum game. If the fund managers are not doing their job properly then I will lose out. Most people are wrong anyway in the market.Constructive comments welcome.

QuoteOriginally posted by: BankingAnalystI agree that pension / mutual fund managers will "try" to do something to maximise my portfolio. However, when I look closely at the chart for the past few years, the fact is that they simply have the shape as the equity / property index. i.e. equity pension fund lost big time 2008 and 2009, then have massive return on 2010 and 2011, then the return gets stable afterwards / slightly up trend. While I look at the equity index (FTSE 100 / DJI) they clearly have the same shape / % of return, so I would suspect something is wrong here as they always have my cash sitting on the equity market while on a down trend they did not even try to hedge the position. So how come I pay them at least 1% as the management fee? This is equivalent to spread bet on IG index and you go and buy the FTSE 100 and sit there for your life (will you do it? I doubt, but the fund managers are doing it now) For me I do prop trade at work. I made money and the pnl comes from someone else - i.e. someone should be losing consistently. It is always a zero / negative sum game. If the fund managers are not doing their job properly then I will lose out. Most people are wrong anyway in the market.Constructive comments welcome.You make money today, but you might lose it all tomorrow.Long term returns are well documented. I doubt that anyone can add value over the long term. Most of the outperformance is short run and not persistent. there are persistent returns from owning equities, bonds, property etc.

QuoteOriginally posted by: BankingAnalystI agree that pension / mutual fund managers will "try" to do something to maximise my portfolio. However, when I look closely at the chart for the past few years, the fact is that they simply have the shape as the equity / property index. i.e. equity pension fund lost big time 2008 and 2009, then have massive return on 2010 and 2011, then the return gets stable afterwards / slightly up trend. While I look at the equity index (FTSE 100 / DJI) they clearly have the same shape / % of return, so I would suspect something is wrong here as they always have my cash sitting on the equity market while on a down trend they did not even try to hedge the position. So how come I pay them at least 1% as the management fee? This is equivalent to spread bet on IG index and you go and buy the FTSE 100 and sit there for your life (will you do it? I doubt, but the fund managers are doing it now) For me I do prop trade at work. I made money and the pnl comes from someone else - i.e. someone should be losing consistently. It is always a zero / negative sum game. If the fund managers are not doing their job properly then I will lose out. Most people are wrong anyway in the market.Constructive comments welcome.Some points:- Remember that the original purpose of a mutual fund was to provide the market return by pooling investment (hence mutual). It can be hard to implement market return as a small private investor. Less so post-ETF... but even here you are still paying to obtain market return. Why do people do this? Because for most people this is still massively better than putting money under the bed, putting money in a bank, buying only treasuries or attempting to play the stock market themselves (whereupon the 'normal' person decimates their wealth).- Not sure what funds you are refering to... its easy to over generalise. There are the good, the mediocre and the downright awful. But their return statistics are of course going to match the index. They are mandated to hold the index within certain bounds! As you know, the ideal is that there is a beneficial long-term positive offset to the index. There are managers who achieve this goal.- If you look at representative samples of the hedge fund industry and their indicies, they dont actually do that much better than the more passive/long-only funds (excepting the famous examples we all know of, but a private investor generally cannot access these). So in this case you are paying 2 and 20 for a highly volatile exercise in beta-shaping and lumpy returns.- If you are are an awesome prop-trader then what do you care anyway? You can just make the money you need for retirement anyway. Why have the pension fund? Pension funds are designed for low-risk or non-sophisticated consumption. Not for prop traders. - There are strategies out there that augment long only portfolios. Long only equity strategies can be hedged with futures. Yields can be boosted with covered-call portfolios and so on.