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

Thrugelmir

BigBlueSky wrote: »

It is a big saving but it is difficult to say whether my current funds (specialist) although more expensive would of offered any greater returns.

Specialist funds will add diversification to your portfolio. The art of good portfolio management is to make a net gain, or at least not to lose capital. With losers being offset by winners. Impossible to hold the right funds all the time.

With 80% of global trades accounting for just 110 shares. There's a myriad of good companies that are too small to register in the global tracker funds. As their market capitalisation is too small.

Likewise there's growing concern over the use of share buybacks (particularly in the US). Rising share prices aren't always what they seem.

Remember that investing is long term. Just because something is underperforming compared to a benchmark over a short time horizon. Doesn't mean that it's a bad investment. Sometimes better viewed as an opportunity to buy more. Markets move like herds. Safety in numbers. Fortune favours the brave.

BigBlueSky

Alexland wrote: »

As you are on II it's probably not worth changing platform but be aware the FSCS protection limit is still only going up from £50k to £85k from next tax year.

Alex

Doesn't the FSCS protection only apply to cash being held with II before being invested ? - As each investment is in a particular fund ?

Alexland

BigBlueSky wrote: »

Doesn't the FSCS protection only apply to cash being held with II before being invested ? - As each investment is in a particular fund ?

No it should also cover you for fraud occuring within the platform or fund manager.

It obviously won't cover you for investment performance, etc.

Alex

BigBlueSky

Alexland wrote: »

No it should also cover you for fraud occuring within the platform or fund manager.

It obviously won't cover you for investment performance, etc.

Alex

Do people tend to split their investments (such as a SIPP) between multiple providers (as you do with savings accounts) because of this?

Alexland

BigBlueSky wrote: »

Do people tend to split their investments (such as a SIPP) between multiple providers (as you do with savings accounts) because of this?

Looking at the posts on this forum it is clear that people do different things. Some people keep their investments under the limit, others like to have them all in one place and people like me have some accounts over the limit but attempt to have a reasonable spread such that the loss above £85k would not be too life changing.

Alex

BigBlueSky

Alexland wrote: »

Looking at the posts on this forum it is clear that people do different things. Some people keep their investments under the limit, others like to have them all in one place and people like me have some accounts over the limit but attempt to have a reasonable spread such that the loss above £85k would not be too life changing.

Alex

Thanks - I'd never really thought about splitting my SIPP before, but on a 300K valuation I would have to split it between 3 or 4 platforms.

Alexland

BigBlueSky wrote: »

Thanks - I'd never really thought about splitting my SIPP before, but on a 300K valuation I would have to split it between 3 or 4 platforms.

Or maybe just two and accept the risk on the difference. That's what I do with my similar valued SIPP and workplace pension. My SIPP is 100% equities and my workplace pension has a good value bond fund (but also has an ok equities fund). Overall I have them configured so the total cost is under 0.25% including both the platform and fund management fees.

Alex

AlanP_2

If invested in main stream options via a main stream provider what is the real risk that you would need the FSCS to step in an bail things out?

What could cause that to happen? Essentially massive fraud as I see it that is aided and abetted via the majority of the staff and large enough to siphon of all the invested money, not having purchased the relevant equities / bonds etc.

To my mind that risk is so low that it can be ignored. However if I had day £300k I would be tempted to split it as any type of major IT failure, staff going on strike, minor fraud, human c*ockup etc. could impact the ease at which you could access your money which you may need to cover living expenses.

Alexland

AlanP wrote: »

Essentially massive fraud as I see it that is aided and abetted via the majority of the staff and large enough to siphon of all the invested money, not having purchased the relevant equities / bonds etc.

Some frauds only take a few people in the right departments. With big enough pots you can still maintain very low costs while spreading your exposure across multiple platforms and fund managers. The fun is working out which provider makes most sense for each type and size of account. The smaller accounts usually end up being the most expensive e.g our LISAs but even with HL we have a roadmap to eventually getting onto capped fees.

Alex

AlanP_2

Alexland wrote: »

Some frauds only take a few people in the right departments.

True Alex, but in the context being discussed is such a fraud going to take down the entire organisation and leave clients dependent on the FSCS? More likely to have any loss made good by the provider when it comes to light I would say.