How many funds?

RomfRed

Hello All,


I'm looking at opening a new SIPP with regular monthly contributions. Whilst I'm comfortable with selecting funds, what I'm not sure about is how many funds I should select for a new sipp. Looking at Fidelity and HL, if you look at their "ready made" portfolios, HL seem to think 3-4 funds but Fidelity only one. Is there a general "rule of thumb" regarding how many funds you should start off with.


Best Regards,

dunstonh

How many funds?

As many or as few as meets your target asset allocation. I may use one if its a multi-asset fund but 10 if it is a sector allocated portfolio using single sector funds.

if you look at their "ready made" portfolios, HL seem to think 3-4 funds but Fidelity only one.

It is largely pretty pointless using a SIPP if all you are going to do is go in these cash cow portfolios. It is an expensive way of doing things.

SIPPs are experienced investor options. They can be low cost with a select range of investments but are generically the most expensive option. Especially if you go with in-house pre-built portfolios. Is this what you really want?

RomfRed

Thanks for you reply. The "Ready made" comment was just to illustrate how different providers do their allocation. I wondered if there was a reason behind it. But as you have a mentioned Fidelity is Multi asset so it only has one fund whereas I assume HL is more sector allocated. Make sense. However at the beginning wouldn't having too many funds dilute your investment and spread it pretty thinly?

Malthusian

Piyush_Avichal wrote: »

However at the beginning wouldn't having too many funds dilute your investment and spread it pretty thinly?

£5,000 in a multi-asset fund or £50 each in 100 single sector funds is worth the same amount of money. The latter has more of a time cost to administer, but if you have chosen a ready made portfolio then it makes no difference to you as you aren't doing the administering.