SIPP Allocation Trends

dazman_3

Hi,

Been doing some scanning/lurking on the epic 'Income Drawdown...' thread and also others on SIPP allocation. Edinvestor suggested in 'Income Drawdown':

"So if they establish an investment package consisting perhaps of shares paying an overall dividend yield of 5-6%, property funds payng 6%, corp bonds 6-7%similar and gilts/ cash of around 4%, then they can take an income of around 5.5% and leave the capital entirely alone to grow for later"

I like this and was wondering what a generally perceived good allocation was and if anyone can recommend specific funds. :beer: My thoughts so far:

40% in a HYP.
No probs with this and it's easy to setup as per Fool strategy. I currently use share builder outside a pension for this and the recent performance and yield are awesome. Market Growth exposure of an index or better and 5% a year income even with only minimal maintenance to keep the yield up!

25% Property Fund.
NFU or Cornhill seem to come out tops on Trustnet

25% Corp Bond.
No obvious pension ones via my screener - any advice?

10% Cash/Gilts
I think only 10% because although the returns are guaranteed – they are so poor.

EdInvestor

Hi dazman

Since you're already in listed share mode, for your property fund exposure you might like to look at the offshore trusts run by the big insurers (who run most of the property funds anyway).

Here are a few:
The EPICS are

UBR (Scot Widows)
SLI (Standard Life)
FCPT (Friends Prov)

There are others and there are also unit trusts.More should be on the way as they are now allowed in ISAs.

Can't help with corp bonds, to be honest the state of the bond/gilts markets these days is so chaotic I can't see it's sensible to get it in there really.The risk is too high for the normal small additional return over cash, never mind the appalling current return.

Some people like preference shares, which are bond like.It's not an area I've investigated. but I know there are some good yields there.

Have personally just increased all the other exposures a bit and made sure all the risk protection HYP boxes were properly ticked for the time being. The HYP returns are indeed pretty seductive, can't disagree