SIPP - My Current Portfolio - Variety of Investments - Opinions/Comments ?

BigBlueSky

Alexland wrote: »

If on II then you can get cheaper than VLS - consider a mix of HSBC FTSE All World (0.16%) and Vanguard Global Bond Index Hedged (0.15%) funds rebalancing using trade credits.

Thank you for that - as well as everyone else for all the information it is really useful.

ams25

BigBlueSky wrote: »

Thank you - Really appreciated.

I get confused with passive and active - is passive like the trackers and active where the actual breakdown of the fund changes as the fund manager sees fit ?

yes, that's correct.

Here is an article on the core and satellite approach.

AnotherJoe

BigBlueSky wrote: »

Thanks - That is the tricky part and where I have been struggling. Trying to decide what asset allocation I want. I am investing for the longer term over 15 years, so are happy to be more adventurous.

Can anyone suggest any guides that may help me decide on this ?

Not a guide, but an approach would be to decide that its impossible to decide what would do well in a detailed allocation, so you buy a global diversified tracker fund as your backbone which deals with that problem.

And then you spice it up a bit by adding a few conviction funds (or shares), for example you might think that health oriented funds, or battery technology, or china or whatever will do well so you buy some of those as "satellites" to your core.

Well, thats what I've done anyway.

BLB53

Trying to decide what asset allocation I want. I am investing for the longer term over 15 years, so are happy to be more adventurous.

Can anyone suggest any guides that may help me decide on this ?

Asset allocation is important. Here's a really good article from DIY Investor which may be of some help?

http://diyinvestoruk.blogspot.com/2016/05/asset-allocation-revisited.html

Personally, I would drop the shares and look at low cost multi asset global index funds for a large portion of the portfolio value - maybe Vanguard Lifestrategy, HSBC Global Stategy for example.

BigBlueSky

Thanks to everyone who has replied so far and provided so much useful information for me to read up on and try to get my head around it.

I am liking the idea of going for primarily equities (either 80% or 100%) and the idea of something like the Vanguard Lifestrategy 80 or 100 for the bulk of my portfolio. I would then add in a handful (at most) of other funds for key areas where the Lifestrategy fund may not cover as much as I would like.

A few suggestions have been made along these lines already, including the Vanguard Lifestrategy, HSBC Global Strategy - as well as mixing it up (to reduce fees further) with a combination of the HSBC FTSE All World (at 0.16%) and the Vanguard Global Bond Index Hedged (at 0.15%).

I do like the idea of the Vanguard Lifestrategy principle - as I can pretty much decide initially on what percent I want in equities and it is all then done for me.

I know as I currently stand my existing portfolio is way off this but this has given me a renewed determination to tidy things up and hopefully be more successful with my investments.

I'm still a little confused however on the difference between a standard tracker fund and an active fund such as the Lifestrategy - With the Lifestrategy 80, isn't 80% of this really a global tracker anyway ?

Johnnyboy11

The Lifestrategy range are funds each made up of several Vanguard funds, see here for the VLS80 components. A Vanguard manager still picks the funds and allocations within VLS80, so there is some element of active management.


VLS60 is my core holding and along with Vanguard Developed World Ex. UK Equity Index makes up 70% of my investments. I have three managed funds as satellites. I also hold two shares (SSE and BT), a mere 3% of my inestments, whose dividends pay my utility bills, and gives me a nice warm feeling

BigBlueSky

Just been looking into the Vanguard Lifestrategy 100 and comparing it to the HSBC FTSE All-World Index Fund C - They do look very similar indeed. The main difference I am seeing is less UK exposure in the HSBC one. Although performance on both have been extremely similar over the last 5 years (HSBC very slightly higher).

I'm wondering if there is any benefit in going with the Vanguard now over the HSBC one (if I stick with 100% equities).

BLB53

I'm wondering if there is any benefit in going with the Vanguard now over the HSBC one (if I stick with 100% equities).

The UK index is overweight in big oil such as Shell and BP and they will come under increasing pressure due to climate change and many of the large pension funds are considering divestment.

Vanguard holds 25% in the UK index so on the above, I would suggest HSBC may well work out the 'safer' option as its exposure to the UK is under 5% (I think?) and therefore not so exposed to fossil fuel sector.

Johnnyboy11

BLB53 wrote: »

The UK index is overweight in big oil such as Shell and BP and they will come under increasing pressure due to climate change and many of the large pension funds are considering divestment.

Vanguard holds 25% in the UK index so on the above, I would suggest HSBC may well work out the 'safer' option as its exposure to the UK is under 5% (I think?) and therefore not so exposed to fossil fuel sector.

Or hold Vanguard Developed World Ex. UK Equity Index alonside your chosen VLS to reduce UK exposure. Both can be held in a Vanguard account, which charges a modest 0.15% in addition to the funds OCF.

BigBlueSky

Johnnyboy11 wrote: »

Or hold Vanguard Developed World Ex. UK Equity Index alonside your chosen VLS to reduce UK exposure. Both can be held in a Vanguard account, which charges a modest 0.15% in addition to the funds OCF.

Thanks again for the suggestions. I would be holding them in my current Interactive Investor account (at least initially), but would look into if it works out cheaper to do it directly in a Vanguard account.

Edit - Just checked. Vanguard don't offer a SIPP as part of their online account.