Setting up global tracker SIPP

Magginnis

Hi,
I am looking at setting up a sipp and came across this very helpful forum!
I have read the book investing demystified by Kroijer and agree with his sentiments.
I would like to go for a global tracker fund (as he advises).
I am 30yrs old, happy to take a risk and so wish to invest in 100% equities.
I have seen the Vanguard lifestrategy 100% equity and Vanguard FTSE Global all cap index funds.
I would really appreciate any advice or feedback as to whether these are the best global tracker funds or if there are any other alternative options (I am happy to use non vanguard products aswell)
I will set up a standing order of £1000 per month.
What would be a good platform to use please? Vanguard don’t seem to offer a SIPP service on their own platform at present.
I have seen Hargreaves lansdown but their charges seem relatively high.
Many thanks in advance for any feedback!

kidmugsy

http://monevator.com/two-ways-to-help-you-find-the-best-online-broker-or-investment-platform/

Audaxer

VLS100 is a fund containing various index trackers, so slightly different from the Global All Cap. I would think either would be a good choice is you want to go passive for 100% equities. But with 100% equities you should be prepared for high volatility and big paper losses when there are equity crashes.

bostonerimus

Audaxer wrote: »

VLS100 is a fund containing various index trackers, so slightly different from the Global All Cap. I would think either would be a good choice is you want to go passive for 100% equities. But with 100% equities you should be prepared for high volatility and big paper losses when there are equity crashes.

Ditto........

A_T

Magginnis wrote: »

Hi,
I am looking at setting up a sipp and came across this very helpful forum!
I have read the book investing demystified by Kroijer and agree with his sentiments.
I would like to go for a global tracker fund (as he advises).
I am 30yrs old, happy to take a risk and so wish to invest in 100% equities.
I have seen the Vanguard lifestrategy 100% equity and Vanguard FTSE Global all cap index funds.
I would really appreciate any advice or feedback as to whether these are the best global tracker funds or if there are any other alternative options (I am happy to use non vanguard products aswell)
I will set up a standing order of £1000 per month.
What would be a good platform to use please? Vanguard don’t seem to offer a SIPP service on their own platform at present.
I have seen Hargreaves lansdown but their charges seem relatively high.
Many thanks in advance for any feedback!

Vanguard are introducing a SIPP later this year - until then you could open a General Account and move your investments into a SIPP when it is available. With the amount you're saving even in the General Account you will still be within tax-free allowances for several months.

Vanguard funds are relatively expensive compared to many index trackers so if you are not using their platform Fidelity Index World fund and HSBC FTSE All-World Index fund have lower costs.

Magginnis

Many thanks!
Yes HSBC FTSE all world looks good and low charges too!
Now just to look into platform to buy into..

Tom99

Magginnis wrote: »

Many thanks!
Yes HSBC FTSE all world looks good and low charges too!
Now just to look into platform to buy into..

[FONT=Verdana, sans-serif]I can understand the need to spread risk and diversify but putting 6% of your investment in the UK but 50% in the US, including 6% in just four US companies, seems risky to me.[/FONT]
[FONT=Verdana, sans-serif]It puts a very large percentage of your investment in an economy and currency where you are not, presumably, based.[/FONT]
[FONT=Verdana, sans-serif]At least VLS100 puts 21% in the UK and “only” 41% in the US. [/FONT]

BritishInvestor

A_T wrote: »

Vanguard funds are relatively expensive compared to many index trackers so if you are not using their platform Fidelity Index World fund and HSBC FTSE All-World Index fund have lower costs.

But they are missing the small cap element of the Vanguard All Cap so you'd expect them to be cheaper.

Andymac1987

How very strange, I'm 30 years old, have just set up my SIPP after finishing the book "investing demystified" and were looking at the same funds through HL!

I did set up a HL vantage SIPP which is a 0.4% platform fee which as you say is relatively high. In hindsight I would have gone for AJ Bell Youinvest which carries a 0.2% platform fee. I think I could consider transferring in the future because the % difference won't be making much odds given my pension pot is so small at the moment.

Regarding your funds, and in keeping with the sentiment of the book, you need a global equity index tracker with the lowest fees. The Vanguard FTSE Global all cap index fund is 0.24% which is quite expensive. I have the Fidelity Index World fund which is 0.13%, and I think you can find cheaper still.

Finally are you sure you want to invest in 100% equities? The book recommends around 80% for our time horizon. How about also buying a corporate bond index fund also to diversify your portfolio and reduce your risk slightly?

Good luck!

Tom99

Andymac1987 wrote: »

Regarding your funds, and in keeping with the sentiment of the book, you need a global equity index tracker with the lowest fees. The Vanguard FTSE Global all cap index fund is 0.24% which is quite expensive. I have the Fidelity Index World fund which is 0.13%, and I think you can find cheaper still.

[FONT=Verdana, sans-serif]That means even more, 54%, invested in the US.[/FONT]

Prism

Tom99 wrote: »

[FONT=Verdana, sans-serif]I can understand the need to spread risk and diversify but putting 6% of your investment in the UK but 50% in the US, including 6% in just four US companies, seems risky to me.[/FONT]
[FONT=Verdana, sans-serif]It puts a very large percentage of your investment in an economy and currency where you are not, presumably, based.[/FONT]
[FONT=Verdana, sans-serif]At least VLS100 puts 21% in the UK and “only” 41% in the US. [/FONT]

The currency risk might be a concern but it shouldn't matter that 50% is US focused as many of those large companies are not particularily linked to the US economy. For most large global corps it doesn't really matter which company they are listed in. Also, for that matter VLS100 being 21% UK does expose it to currency issues quite heavily still.