SIPP Advice

[Deleted User]

On a side note... Impressive performance from funds like Pyrford Global Total Return. Can’t be easy being quite so consistent in underperforming the benchmark year after year.

bowlhead99

splodge2001 wrote: »

I did some research, looking at funds the seemed strong over time and mostly avoiding the UK. I also wanted house building (Berkeley Homes) for post Brexit, an environmental fund (JLEN) and an Infrastructure fund (Legg Mason).

Cannabis stocks for the potential huge growth in the sector.

So you wanted to avoid the UK, but wanted UK house building and UK nano cap (perhaps the riskiest segment and hard to get right) and UK logistics-focused real estate (BBOX)?

And you like the idea of things with potential huge growth, so you went for cannabis, without necessarily appreciating that the huge growth of the potential market was already priced into the shares of both good and bad companies and that if someone emerges triumphant a lot of rivals will fail. 'Energy' and 'Technology' are other sectors which have lots of potential growth so you are wondering if you should now go for those too.

But over the long term, there will be inevitable growth in most of the other sectors too, e.g. healthcare, making and selling products and services that consumers want or need, making and selling products and services that businesses want or need; developing land, constructing and operating infrastructure, obtaining and refining raw materials, media and entertainment etc etc etc. Putting only £30k in and trying to cover all the industries which have potential growth, using industry-specific funds, is a lot of work.

And if you're going to use generalist global or regional funds which invest according to the fund managers' best ideas (or according to a broad index) and then you decide you are going to take a double dose of Energy by buying an energy fund on top - what does that say about your allocation strategy?

If you were mainly following an active management strategy you would basically be saying you know better than those active investment managers because they don't invest enough into energy businesses even though such businesses are the future. If you were mainly following a passive management strategy you would basically be saying you know better than the weight of all investor capital, the index of all investors in the market, because they don't allocate enough into Energy businesses even though such businesses are the future.

With your limited and recent track record of picking a growth sector and deploying money into it badly and losing enough to offset your normal gains elsewhere, it doesn't seem like you should be second-guessing where to put your money. And for £30k I would agree with others that you don't need a double-digit number of investments. The instinct to consolidate, mentioned in your first post - is a sound one; better IMHO than the instinct to start adding energy and tech funds to the mix - also mentioned in your first post.

You mention your husband has a separate £126k fund with Aviva which is mostly contracted-out of serps money. So presumably if he accumulated that out of his serps money he must have been for a decent amount of time in a workplace pension scheme that will form the cornerstone of his retirement income ; and that (DB?) pension plus the Aviva money will mostly see you not financially destitute post-75.

If that is the case, the £30k might be considered more as 'fun money' to invest for 20 years with a flutter on cannabis or biotech or energy or whatever here or there - but if you don't have any requirement to take on a lot of risk to make the highest possible gains that could exist, you will find life is much simpler to hold fewer funds (whether managed or passive) and simply sit back and wait, for average returns and only average levels of risk.

It can be difficult to adopt the mentality of 'sit back and leave it' when you are coming from the mindset of "I've been managing my husband's portfolio for ten months", because you and he perhaps have a fear that if you stop managing it, it'll fail. But really a broad set of investments should not need to be 'managed'. If it's in a load of individual cannabis stocks then yes you would need a heck of a lot of upfront and ongoing research and tinkering and still do worse than a professional in the sector, so using funds rather than individual stocks is a key thing to do. But having identified one or two or three global equity or mixed-asset funds you should really just be able to leave them with just an occasional rebalance.

In your shoes I would consolidate into fewer funds, simplify it, and maybe take the view that when the £30k has turned into £50k after five or six years (or ten or more years, depending on what happens to markets) you'll look at the strategy again for the remaining 10-15 year timeframe.

Albermarle

He also has a fund with Aviva worth £126,000 (mostly contracted out Serps).

The fact this was originally a Serps related pension fund , is not relevant and it is just a DC pension same as the SIPP .
So seems strange that a lot of detail is given about the £30K in the SIPP and no detail about how this larger sum is invested within the Aviva pension.
As already mentioned they should be managed together, or at least in tandem .

[Deleted User]

Given that splodge wants to manage her partner's pension, that it represents a fraction of their fortune and time is on their side; to me it seems crazy for her to be loaded up in a bunch of funds.

The performance of most of these funds in 2019 has been pitiful.

Much better to dump them and invest in a couple of tech stocks with good names, Apple and Microsoft are two of my favourites.

The couple are likely to be happier for a number of reasons:
1) Clarity. You should know where 100% of your money is invested, and what these companies do. Contrast with the average fund comprising a kaleidoscope of different investments.
2) Scale. Although at first it may seem counter-intuitive to concentrate the lot in just two stocks, either one is worth more than all your funds put together.
3) Agency. If you really want to manage your investment, you really should manage it yourself rather than give responsibility to a fund manager.
4) Dividends. Both companies will be adding to your pension every three months, rather than fund managers skimming from you.
5) Past performance.
6) In twelve months' time, if the UK is facing a no-deal Brexit, £ will be worth less.
7) Future performance. No promises, but if this self-managed investment does outperform the larger sum over a period of time, it could give the couple confidence to take control of the main pot from Aviva. It will, in any event, provide a useful comparison.

[Deleted User]

Someone has a crystal ball.

kinger101

ZingPowZing wrote: »

5) Past performance.

:rotfl:

7) Future performance.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

splodge2001

Thanks for your really in depth response. I'm a newbie so I guess that's why some of the ideas sound contradictory or not particularly clever! I wanted to avoid the UK in the main, but not totally. Hence most of the money is in Fundsmith & Lindsell Train. Cannabis has been a disaster. I think I might as well hold on this now but it has taught me to stay away from individual shares. There is no DB pension. Only the Aviva pension which is up a reasonable 17% it's invested 100% in a Liontrust fund - which I also chose in Feb. We also have a BTL but it has a disgustingly enormous mortgage which of course can no longer be offset against profits...but that's another story. We got this £30k fund out of an appalling workplace pension scheme with a large transfer penalty since 1998 it increased by £10k or 2% per annum. I was so annoyed at the broker and the scheme I said I'd manage it myself. I have performed no better!

splodge2001

Pyford will be the first to go I think!

splodge2001

Does no one think I should go more into Fundsmith or Lindsell Train?

bigadaj

ZingPowZing wrote: »

Given that splodge wants to manage her partner's pension, that it represents a fraction of their fortune and time is on their side; to me it seems crazy for her to be loaded up in a bunch of funds.

The performance of most of these funds in 2019 has been pitiful.

Much better to dump them and invest in a couple of tech stocks with good names, Apple and Microsoft are two of my favourites.

The couple are likely to be happier for a number of reasons:
1) Clarity. You should know where 100% of your money is invested, and what these companies do. Contrast with the average fund comprising a kaleidoscope of different investments.
2) Scale. Although at first it may seem counter-intuitive to concentrate the lot in just two stocks, either one is worth more than all your funds put together.
3) Agency. If you really want to manage your investment, you really should manage it yourself rather than give responsibility to a fund manager.
4) Dividends. Both companies will be adding to your pension every three months, rather than fund managers skimming from you.
5) Past performance.
6) In twelve months' time, if the UK is facing a no-deal Brexit, £ will be worth less.
7) Future performance. No promises, but if this self-managed investment does outperform the larger sum over a period of time, it could give the couple confidence to take control of the main pot from Aviva. It will, in any event, provide a useful comparison.

OP please ignore this poster, he has been shown to be an inexperienced and naive investement fool on many threads, so far a lucky fool but a fool all the same.

ZPZ you seems to have admitted your errors on a previous thread, please don't mislead people again.