Boring german fund(s)?

harrys66

hello

New to investing, currently have about £7k in cash in a SIPP with H&L, looking to add about £5k a year over next 10-15 years....

Something passive, low cost, that tracks utilitites/large corps in germany?

thanks

AnotherJoe

Theres a big difference between "utilities" and "large companies", in Germany.
Utilities will do their busienss pretty much only in Germany.

Big companies, lets say BMW, Merk, Siemens etc will do a huuge % of their business globally.
The two will also have very different modes of business, profit models, state control and so on.

harrys66

oh ok, I suppose I should reword it as .... "utilities and german corps who derive atleast 50% of thir profits from turnover within germany itself?

ps can you buy long term (10 year) german goverment bonds (gilts?) within a SIPP and still get the UK tax benefit?

AnotherJoe

Yes to the latter. For exampel something like this https://www.hl.co.uk/shares/shares-search-results/d/db-x-trackers-ii-germany-govt-bond-ucits-dr

For the former, that sounds more like an ETF.

Whether there is such a beast, no idea.

harrys66

AnotherJoe wrote: »

Yes to the latter. For exampel something like this https://www.hl.co.uk/shares/shares-search-results/d/db-x-trackers-ii-germany-govt-bond-ucits-dr

Wow .... quite surprised that "free" uk tax monies can be invested in german goverment bonds .... such an interconnected world Although looking at the charges i think most of that will end up in H&L's pockets !

For the former, that sounds more like an ETF.

Thanks wil do some hunting around

Whether there is such a beast, no idea.

..................................

londoninvestor

harrys66 wrote: »

Wow .... quite surprised that "free" uk tax monies can be invested in german goverment bonds .... such an interconnected world Although looking at the charges i think most of that will end up in H&L's pockets !

HL is expensive for "funds" (unit trusts and OEICS) but not too bad for shares and ETFs.

For a £7k holding in an ETF in your SIPP, HL will charge you 0.45%, i.e. £31.50pa. For (say) £70k, you'd pay the capped rate of £200.

Not too bad when most SIPP providers charge £100-150pa for the underlying admin of the SIPP structure.

londoninvestor

harrys66 wrote: »

oh ok, I suppose I should reword it as .... "utilities and german corps who derive atleast 50% of thir profits from turnover within germany itself?

One idea:
https://www.hl.co.uk/shares/shares-search-results/d/db-x-trackers-mittelstand-mcap-germany-dr

Not sure it would meet your detailed criteria, but as AnotherJoe says, large cap German companies will do substantial exporting, so you're probably looking at mid-caps if you want concentrated exposure to the domestic German economy.

(Not sure this is as "boring" as you want though - a heavy concentration in any one country is likely to be more volatile than a global portfolio.)

Thrugelmir

harrys66 wrote: »

ps can you buy long term (10 year) german goverment bonds (gilts?) within a SIPP and still get the UK tax benefit?

Offer a negative yield currently.

What's your objective?

dean350

You could try Indus Holdings DE which owns a portfolio of German SME's across differing sectors. Did very nicely for me for a couple of years after I bought in about 2016 but has dropped back in the past couple of years as the German economy has slowed a little. Might be a good time to get in but as ever DYOR

https://www.indus.de/en/investments/portfolio-companies.html

Malthusian

Investing in a single country, and a single sector or limited selection of companies within that country, is not "boring". It is high risk.

It makes very little sense to break a fund of £7k down into single-country allocations. Any extra return you make will never make up for the cost of your time. Alternatively, if the idea is to invest the whole lot in a limited set of German companies, you are running a significant risk of losing money (see Japan).

harrys66

Hi, thanks for the replies, you've changed my mind !

Quite happy with £22,320 of growth on my "hmrc fund", with a final cash pot of £111,690 for when my state pension kicked in (perhaps buy a small annuity)

Then I started thinking about not keeping all my eggs in one basket (the UK basket) especially with regard to all the QE's that's gone on, Assumed that the German economy... having no deficit, a healthy push on renewable's etc would be a safer bet, looks more complicated now

Was thinking.... regarding government bonds (again more complicated than i realised), do the following bonds guarantee my full SIPP monies back, on the sole provision that the UK doesn't go to negative interest rates, or am I missing something?

https://www.hl.co.uk/shares/corporate-bonds-gilts/bond-prices/uk-index-linked-gilts

thanks