Aviva Share Discussion Threads

[fenners66] 19/2/2024 22:15

Investing in a SIPP and collecting dividends (and potentially growth) instead of not even getting your own money back from an annuity should not be seen as risky.

Lets face it - the "pot" only likely exists because it has been accumulated over decades of equity investment. No one says its risky then !

I don't see the pension industry selling an annuity each year during your working life as a solution to get to a pension (compounding returns over decades ?)
No its perfectly acceptable to invest in equities for decades - the only place to get that track record of growth.

So continue the same and drawdown in retirement passing on to your kids / other half when you die.

[cjac39] 19/2/2024 21:31

i dont invest outside ins cos. i know them quite well and see all the opportunities i need. ie old school value, growth, em - ins offers all. and it seems few public side or private side investors understand them either. the analysts are rubbish and there is only one fund i know of invested in them. easy pickings

[lippy4] 19/2/2024 21:06

cj

i think you have to also look at strong companies like gsk who dont pay big bucks divis but are very strong in what they do and needed in a modern society so in my opinion will get stronger..

[rongetsrich] 19/2/2024 21:05

Thanks cjac39, I appreciate your helpful information and it’s not just me that’s so concentrated.

[cjac39] 19/2/2024 20:34

Rongets
I need to diversify, so would appreciate your input.

its an interesting statement. ive come to the view that actually diversifying equities is not that helpful especially when you think about cos like you mention. the pra has driven such enormous over capitalisation of ins cos they are in my view bullet proof. the general mkt and especially quant funds just dont see this for reasons unknown. because the high div payouts i suspect people also worrying about falling knives. plus muppets from time to time cut or suspend divis.

wrongly or rightly im incredibly concentrated and overweight av and mng. i own some lng but less so as i never liked all the esg nonsense. i own chesnara as i like the mgmt team, zero just as i worry about back book issues, and an array of us global compounders like chubb and ren re / arch. brokers are also worth looking at like bro or wtw

[yump] 19/2/2024 20:03

1robbob

Hadn’t really thought that through. Presumably therefore investment to feed annuities is less sensitive to an unknown degree to interest rate chsnges, or rather, the differential between high yielding stocks and the prevailing interest rate.

[rongetsrich] 19/2/2024 19:25

Xongkudu, if you don't mind me asking could you mention other high yielders you hold please?I hold Aviva, LGEN and MNG with some ITV as a punt. I need to diversify, so would appreciate your input.

[xongkudu] 19/2/2024 18:27

Spawny

I think you’re right. It’s one of the main reasons I manage my own SIPP with an emphasis on solid high yielding dividend shares. Not only do I get a good circa 8% income but I can also pass the SIPP to my kids if/when I die.

Admittedly my dividends aren’t guaranteed like an annuity but I still think a SIPP is much better for me. I’m also benefiting indirectly from annuities by investing in Aviva.

[huncher] 19/2/2024 18:17

Covid may have jumbled the Annuity tables a bit but the Actuaries will have seen through that. Its basically a win win product - you are paying a lot for peace of mind.

[spawny100] 19/2/2024 17:53

I was just going to post something similar! If someone aged 65 pays 100k for an annuity that returns a guaranteed 7% a year there's a pretty strong chance that person will die before they've had their money back no? Aware that others here are far more knowledgeable in this field than me so I might well be missing something!

[1robbob] 19/2/2024 17:47

yump
It isn't just current and future interest rates and yield
annuities are also, and perhaps more importantly, a life expectation game
As the buyers give up their capital for a guaranteed annual return

[yump] 19/2/2024 17:28

To get the 7% presumably at some point the funds will start buying all the stocks that are yielding 8%+, because interest rates at 5-6% for a few years isn’t going to do it.

[xongkudu] 19/2/2024 16:54

They must be coining it in with the uptick in annuities and insurance premiums aren’t getting any cheaper. Pensions and private healthcare also doing well.

Who knows what the results will bring but I’m optimistic.

[smurfy2001] 17/2/2024 10:55

Annuity sales jump to the highest level in years as savers are tempted by deals worth 7%-plus

[whatsup32] 17/2/2024 10:36

The Times " Annuity sales soar as rate rises"
Sales of annuity leapt by 46% last year

[cjac39] 16/2/2024 21:40

its a good thought 1jat. competition issues on wp are surmountable as av closed. amgt a no brainer as agi silly. platforms / workplace highly synergistic for sure. but never going to happen. AB wont do it ever nor woukd mng. it needs external influence. mng has gotten too highly valued for a deal at the mo i think. run the divi for a while and let int rates lower the value of pvst a bit first

[1jat] 16/2/2024 18:57

CJAC…i presume you would exchange MNG for AV shares in a merger?
It seems to me this is a realistic deal that would address weaknesses in both organisations.
There is plenty of overlapping cost to take out….
AV run the unit linked business (corporate pensions and individual) and the annuity /mortgage business, MNG runs the WP books.
MAGIM absorbs Av Investors
AV wealth takes over MNG Wealth businesses.
The time has come for this deal…approaching 20 years since Aviva last tried it….both companies are much more focused.

[skinny] 16/2/2024 09:04

This is a useful link - although it only goes up to August 2023.

[muscletrade] 16/2/2024 08:40

Probably 5% would be fine if we had not had ultra(ridiculous) low rates for years after GFC 2008.

[muscletrade] 16/2/2024 08:28

"Normalise" in the sense that interest rates are not being driven by efforts to contain rampant inflation(largely caused by a convergence and fall out from at least two major events) on the one hand followed by anticipation/expectation of unwinding that effort. What that level should actually be, that's the question. Cleary 5% is perceived to be too restrictive right now.

[uppompeii] 16/2/2024 08:10

Hmm, do you mean rates normalise up or down? Historically, normal is around 7 or 8%.

[muscletrade] 16/2/2024 07:57

For some considerable time now the AV share price has been strongly influenced by factors outside its control starting with the US banking "crisis" last year, ( from which it has not fully recovered ) and Interest rates have been the thing since then. Sooner or later rates will normalise and we can get back to considering fundamentals, but some ways to go yet IMHO

[muscletrade] 16/2/2024 07:47

Yes cjac, very pleased it turned out ok for your buy earlier in the week and agree yr view in the long run AV great value, ditto with the other large insurers/pension providers. It could have turned out to be very messy day if the UK inflation figures had not been quite so "positive" earlier this week but fortune favours the brave. Im fully loaded on AV, MNG, L&G and Phx for quite some time now(years) so not really in a position to add more, and of these AV has been the most profitable so far, helped of course by the capital return.

[cjac39] 15/2/2024 19:50

muscletrade turns out my purchases were ok! id like to say skill rather than luck. not timing wise - who cares day to day - but im really coming round to realise how the fcf yield of these uk insurers is incredible vs the price you pay. for eg you can pay 1.7-2 x bv to buy ren re or arch or even chubb. obviously better businesses than av but actually not making that much higher an roe. or you can buy aviva at fcy of 12-14% at bv. risk adjusted its an amazing trade really. trouble is investor flows into passive and anti uk sentiment generally means this disconnect wont connect but meanwhile you get nice yield. so its an income stock with limited share price upside perhaps but thats ok too

[xongkudu] 15/2/2024 07:31

As expected the UK dipped into a technical recession back end of 2023 but according to most if not all economists this is no longer the case and we are now back in growth territory. Not a great big story although the media will milk it. Actually to be fair to the BBC they are reporting it well for once.

It will present excellent buying opportunities today although I expect lots of people will be thinking the same.