Sipp lump sum investment

Jim1904

After a poor year with my sipp losing around 7% I've made the decision to leave my financial advisor and move platforms. My costs will reduce from around 3.5k pa to £200 pa.
I was originally intending to split my pot between the vanguard lifestyle 60 fund and Hsbc global strategy balanced . I'm now unsure how effective these funds will be going forward. Fixed income investment seems to be almost as risky as equity at present and isn't offering the traditional protection.
Everything I've read suggests diversification as key .. can anyone suggest diverse managed alternatives to the passive vanguard and Hsbc funds I mentioned ? Would holding a large percentage of my pot as cash or in a money market fund be a good idea in the current climate ?
After such a poor year my aim going forward is mainly preservation of my current pot with the intention to increase risk when markets pick up.

barnstar2077

Hi,

I am planning to invest in a SIPP at the moment and have spent the last couple of weeks reading up and trying to figure out the right investments too.

LEGAL & GENERAL ALL STOCKS INDEX-LINKED GILT INDEX CLASS C - ACCUMULATION (GBP)
LEGAL & GENERAL GLOBAL INFLATION LNK BOND INDX CLASS C - ACCUMULATION (GBP)
LEGAL & GENERAL INTERNATIONAL INDEX TRUST CLASS C - ACCUMULATION (GBP)
LEGAL & GENERAL EUROPEAN INDEX CLASS C - ACCUMULATION (GBP)

At the moment I am looking at the above, as they seem to meet the criteria that I am looking for. The first two have lower risk associated with them. The third is global but has a large proportion of US, so I have added the fourth to further diversify. They are all cheap as chips as far as running costs go. I am looking to leave money in them for 15 years though and they may not be suitable if you have a smaller time frame. I plan on investing 25% of my monthly SIPP amount into each one. I will be using Hargreaves Lansdown for my SIPP. This is not advice, just what my current plans are. You will get a hundred different answers I am sure.

Would be very interested myself to hear what others have to say though.

dunstonh

Would holding a large percentage of my pot as cash or in a money market fund be a good idea in the current climate ?

What current climate?

After such a poor year my aim going forward is mainly preservation of my current pot with the intention to increase risk when markets pick up.

So, you are aiming to sell after values have fallen to crystallise recent losses and then buy back after the markets have gone up again?

Jim1904

The Current climate seems quite unpredictable . I'm unsure where to put my money

I'm moving away from a poorly performing expensive sipp to a low cost option. I realise that timing markets is impossible for anyone but it seems counter productive to invest in funds which seem pretty likely to continue eating into my pot.

dunstonh

The Current climate seems quite unpredictable

The "current" climate is always unpredicatable. No matter when that "current" happens to be.

There are always unknowns and unpredictable events.

I'm moving away from a poorly performing expensive sipp to a low cost option.

SIPPs do not perform. The assets within the pension is where the performance is.

I realise that timing markets is impossible for anyone but it seems counter productive to invest in funds which seem pretty likely to continue eating into my pot.

Why are they likely to continue eating into your pot?
When will that end?
When will you know that it is ended?
When will you go back in again?

Trying to time the market is futile. Punching through it and coming out the other side is usually the best option for most people. Not trying to guess when you should go in and out of the market. Especially deciding it after 15% or so losses have already occurred.

Jim1904

So can you suggest a diversified managed alternative to the vanguard or Hsbc funds I mentioned ?

barnstar2077

I think reducing running costs is very important. Saving almost three and a half grand a year would be a lot of money to me, but I do not know your circumstances. But at the same time (depending on your current investments) you may recoup your current losses over time. It is a difficult situation to be in. I am trying to reduce my running costs from the get go, hence using trackers. Minimal running costs with diversity, and half of the pot with a much lower risk is the advice that I have read, Only time will tell though...

Jim1904

I was paying expensive financial advisor charges and high platform charges for a sipp which contained low cost passive funds. I'm not attempting to time the market . I'm just starting afresh and looking for a good starting point. Or are you saying I should just buy back the passive funds I held in the previous sipp and wait for them to perform better ?

barnstar2077

Sorry, I thought you meant that you still had the previous fund and had decided you were going to change it shortly! I didn't realise you had already switched platforms, my apologies.

dunstonh

I was paying expensive financial advisor charges and high platform charges for a sipp which contained low cost passive funds.

And what is the problem with that?

Our model portfolios have a mix of passive and managed and are more expensive than VLS and HSBC GS but are outperforming them net of charges.

Charges are important but they are secondary to investment selection. It could be that you are in an expensive and not very good portfolio but unless you give it some analysis beyond looking only at charges and type, you are not in a position to say whether it is good or bad.

So can you suggest a diversified managed alternative to the vanguard or Hsbc funds I mentioned ?

I could do but it would result in higher charges than those and it appears you dont want that.

Jim1904

The problem was that i can pick out gloablly diverse tracker funds without spending £800 a quarter on a financial advisor .

Perhaps asking for a little help on here was not the best idea