Seeking Advice on HL SIPP allocations

OldMusicGuy

So just to summarise for jellydream's benefit, please continue your research into multi-asset funds. Don't rush, holding cash in an HL SIPP costs nothing (but the interest you get is minimal). You cannot allocate funds in an HL SIPP to any form of short term interest-bearing account. It either sits as cash (paying very little interest) or you invest it in the many thousands of investment options they offer.

So you need to decide what to do. You can allocate some or all of it to a range of investments (for example, you might decide you want to keep some of it in cash anyway).

Please take a look at the book I recommended. Popular multi-asset funds on here include (but aren't limited to) BlackRock Consensus, HSBC Global Strategy, Legal & General, Vanguard Lifestrategy.

I have recently discovered the PensionCraft YouTube channel which I quite like. Here is a good explanatory video on the Vanguard Lifestrategy funds (check the site for other fund videos as well):
https://www.youtube.com/watch?v=p-O3d6mel28

[Deleted User]

I have to say that the performance of some funds mentioned under the umbrella names above has been good over the last five years:

Blackrock NUR II Consensus I up 73%
Vanguard Lifestrategy 100% Equity up 70%
HSBC Global Stategy Balanced Portfolio up 52%

These funds may be a little racy for the cautious investor but the returns have been good, and I wouldn't deter jellydream from following that path.

Which is not to say that the alternative strategy of picking a handful of individual stocks would not have outperformed those funds over the last five years.

SonOf

I have to say that the performance of some funds mentioned under the umbrella names above has been good over the last five years:

Blackrock NUR II Consensus I up 73%
Vanguard Lifestrategy 100% Equity up 70%
HSBC Global Stategy Balanced Portfolio up 52%

Obviously, they are not like for like comparisons but putting that aside, it is no surprise they have been good.

These funds may be a little racy for the cautious investor but the returns have been good, and I wouldn't deter jellydream from following that path.

Two of them are. One is closer but there are versions at lower risk levels .

Which is not to say that the alternative strategy of picking a handful of individual stocks would not have outperformed those funds over the last five years.

If you call those funds racy (one is medium risk the other two are medium/high to high), then what do you call picking a handful of shares? Speculative? Highly adventurous? Certainly a much higher risk than any three of those funds.

[Deleted User]

They came as a surprise to me, Son Of! I don't use funds.
But it would be churlish to crab the performance of these funds, they are perfectly acceptable and a tuned-down version of one may be ideal for jellydream.
Having said that, these funds have in common a large exposure to international investments, helping them to outperform yardsticks like the FTSE or domestic house prices as Brexit has impacted on the value of sterling.
Going forward, one of these funds could prove to be a useful hedge against the impact of Brexit, one of the concerns of the opening post. The OP's assets - house, main pension, income - are valued in sterling. Investing in one of these funds could provide a nice balance, similar to holding a narrow handful of US shares, but with an added level of safety.

bowlhead99

ZingPowZing wrote: »

They came as a surprise to me, Son Of! I don't use funds.

Nearly all of the tens of millions of people who are employed or have retired in recent decades with something over and above the state pension (e.g. workplace pension, personal pension) have investment funds to thank for their retirement income and/or a large part of their wealth.

Even if a person's pension is just the 'defined benefit' of a monthly paycheque related to what they earned back in the days when they were gainfully employed, the reason that the pension trustee is able to afford to pay out in retirement is because weekly or monthly contributions were paid in by an employer and employee over the years, which were collectively invested in a diversified fund of assets.

Someone may be a conscientious objector to using investment funds, and not think that using funds will give a more stable or reliable route to long term wealth generation than picking 4 blue chip stocks out of a hat. With his 4 blue chip stocks, that person feels he has 'taken back control' and can thus navigate Brexit and most other challenges more nimbly, and somehow get tax advantages through a method he doesn't explain.

I suppose we can respect that person's right to be unique, and not do what the other tens of millions of people do. Everyone's entitled to an opinion. The right to hold non mainstream opinions is a human right. If course, people hearing those opinions also have the right to think the person is misguided in some sense, and point out that their advice might be harmful if taken at face value by others.

[Deleted User]

bowlhead99 wrote: »

Someone may be a conscientious objector to using investment funds, and not think that using funds will give a more stable or reliable route to long term wealth generation than picking 4 blue chip stocks out of a hat. With his 4 blue chip stocks, that person feels he has 'taken back control' and can thus navigate Brexit and most other challenges more nimbly, and somehow get tax advantages through a method he doesn't explain.

I suppose we can respect that person's right to be unique, .

Hardly unique but yes, I guess I do, bowlhead.
Nominate your vaunted multi asset fund, I'll pick four stocks and we'll run a thread for a year and see who fares better.

bowlhead99

ZingPowZing wrote: »

Hardly unique but yes, I guess I do, bowlhead.
Nominate your vaunted multi asset fund, I'll pick four stocks and we'll run a thread for a year and see who fares better.

As I said in post #16

Certainly if markets go strongly up in the next year, and dollars strengthen against pounds, it might be a great idea to have 4 megacap equities with lots of dollar revenues. If they don't, it might be more useful to use a diversified fund which isn't 100% equities and has underlying assets and incomes that aren't so heavily dollar-denominated.

But we know that in advance. So the result in 'one, two, or god willing five' years owes a lot to randomness and what markets actually do over that relatively short term period. It seems sensible to put your eggs in four hundred or four thousand baskets instead of just four

It is not a competition

Thrugelmir

OldMusicGuy wrote: »

"My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.)"

When your worth a reputed $79 billion there's no need to take any further risks though.

[Deleted User]

Nevertheless, bowlhead, it would be of interest to readers of this forum to measure the performance of your nominated multi asset fund against the strategy you oppose.

bowlhead99

ZingPowZing wrote: »

Nevertheless, bowlhead, it would be of interest to readers of this forum to measure the performance of your nominated multi asset fund against the strategy you oppose.

What are the 4 stocks you propose, and in what ratio?