SIPP investment ideas for a 25 year old

mattih5

I contribute to the Vantage ISA with Hargreaves & Lansdown and have done for a year and half. Recently I opened a SIPP with them, saving £100 a month. I haven't decided where to invest this yet.

I'm looking to generate ideas of funds to invest within the SIPP. I currently contribute to the following funds in the Vantage ISA:

1. Baillie Gifford Emerging Markets Growth Class A Accumulation
2. BlackRock Gold & General Accumulation Units
3. BlackRock UK Absolute Alpha Class P Acc
4. Invesco Perpetual High Income Accumulation Units
5. Neptune Balanced Fund Accumulation Units

Being 25 I have time on my side and am willing to take risks, which is something I tried to encompass in the above ISA portfolio.

I think the minimum investment on a regular savers basis is usually £50 which would mean I could invest in 1 or 2 funds.

Thanks in advance.

Danamic

A SIPP is just a wrapper to have the luxury of investing in a wide range of assets and tend to have higher charges than personal pension plan.

If you do the calculations, the annual charges by the SIPP can be a considerable % of your percentage fund. The charges of the SIPP + charges of underlying investment usually only make owning a SIPP charge efficient when you have £x amount of funds.

Just out of interest, have you looked at the alternatives at all?

dunstonh

SIPPs are not really cost effective for funds unless you intend to use investments that are not available on cheaper stakeholder or personal pensions. HLs SIPP is not cheap although many think it is for some reason. Probably as they think they rebate charges like they do with ISAs (they dont).

If the HL SIPP does have a limitation of £50pm minimum per fund then the lack of diversification could be quite damaging until you can build up enough funds to be able to diversify.

SIPPs are designed to be used by the more experienced investor. So, if you feel the SIPP is right for you then what investment strategy are you following? The funds you pick would need to fit with your investment strategy. If you have no strategy and its random selection with hit and hope then again, the SIPP isnt likely to be the best option.

purch

HLs SIPP is not cheap although many think it is for some reason

Due to some journo from the Daily Mail, saying it was the cheapest SIPP, a headline they use in all their literature.

Of course being the cheapest SIPP does not in any way make it a cheap Pension Scheme, and of course if you don't choose to use the Investments that HL get a trail commission from, it isn't the cheapest SIPP either :eek:

P.S. And those are very 'fashionable' Fund choices......the type that HL like to pimp.

mattih5

Danamic, no I haven't looked at any alternatives. I thought the charges for HL SIPP are the fund charges, which appear to be low (depending on the funds one picks).

mattih5

dunstonh wrote: »

SIPPs are not really cost effective for funds unless you intend to use investments that are not available on cheaper stakeholder or personal pensions. HLs SIPP is not cheap although many think it is for some reason. Probably as they think they rebate charges like they do with ISAs (they dont).

If the HL SIPP does have a limitation of £50pm minimum per fund then the lack of diversification could be quite damaging until you can build up enough funds to be able to diversify.

SIPPs are designed to be used by the more experienced investor. So, if you feel the SIPP is right for you then what investment strategy are you following? The funds you pick would need to fit with your investment strategy. If you have no strategy and its random selection with hit and hope then again, the SIPP isnt likely to be the best option.

Yes I understand the limitation of £50pm is a limitation, as this has happened with drip feeding money into the Vantage ISA (£300pm); the fund is a lot larger now though so it has become beneficial.

My strategy...as I've got time on my side I was thinking of investing in something more on the risky side i.e. a resources fund or emerging markets. To complement this, perhaps a fund that isn't as risky.

jameswilliams_2

My strategy...as I've got time on my side I was thinking of investing in something more on the risky side i.e. a resources fund or emerging markets. To complement this, perhaps a fund that isn't as risky

It should be just as possible to use these type of Funds within a Personal Pension wrapper, and at a lower overall AMC depending on how the PP was arranged.

I am in the process of moving my PP funds into a SIPP wrapper, and have done quite a lot of research into costs, and I cannot think of any reason to have a SIPP and invest in the same Funds that are available through a good modern style PP. To my mind the only time it would be wise to use a SIPP wrapper to hold just Fund investments would be if you were using Funds that were only available as OEIC/UT and didn't have an equivalent fund available for a pension.

cloud_dog

I like my (OH) HL SIPP so, there

JMatt

I have just moved my PP to HL's Vantage SIPP after about 15 years. Why?
1) I have used HL for ISA and share dealing and have always found their recommendations to be good
2) They provide regular information and let you know when something may affect one of your holdings - e.g. poor results, performance lagging etc
3) Other than an annual statement, I last heard from my PP provider...er...a very long time ago when they were signing me up! As to any information on fund performance, well I have to look that up for myself.
4) HL offer a range of funds with varying charge levels, which are clearly presented.
You pays your money you takes your choice.

dunstonh

1) I have used HL for ISA and share dealing and have always found their recommendations to be good

They dont make any recommendations. They issue promotional literature that often promotes what is current flavour of the month or a new issue. They only give recommendations on their advice service.

2) They provide regular information and let you know when something may affect one of your holdings - e.g. poor results, performance lagging etc

AFAIA, they only do that on their paid service. Not their DIY version.

3) Other than an annual statement, I last heard from my PP provider...er...a very long time ago when they were signing me up! As to any information on fund performance, well I have to look that up for myself.

You werent paying them to.

You pays your money you takes your choice.

You certainly do. About 3 to 4 times higher charges than a stakeholder or personal pension arranged via the same distribution channel.

purch

AFAIA, they only do that on their paid service. Not their DIY version

From my experience, they do keep you quite well informed about things that can impact your holdings....usually an email the day one of your stock holdings releases results, which shouldn't be hard to do in this day and age.

I still consider their customer service to be poor however, especially concerning any subject that isn't Fund related, which is strange considering they are supposed to be a stockbroker.