SIPP Advice

[Deleted User]

https://www.investopedia.com/terms/m/meanreversion.asp

[Deleted User]

That’s cool. And your point?

ianthy

Your list reminds me of my original start point when I was planning to self manage my pension pot... I started with 20+ funds in an attempt to cover every conceivable option. After further research, I narrowed it down to 12 funds. Some are duplicates based on the my desire to spread the risk (VLS and HSBC) but I know if I was pushed I could reduce down to about 8 funds. It's something that has fascinated me about investing in the US, how investors hold very large sum in just a few funds.

splodge2001

So I dumped Pyrford for Fidelity Index World Tracker. In fairness to me, most of the money is concentrated on a few funds! The Aviva pot is invested in a mixed asset fund - Liontrust Sustainable Future Managed S2.

[Deleted User]

ianthy wrote: »

It's something that has fascinated me about investing in the US, how investors hold very large sum in just a few funds.

Don’t see any reason for lots of funds, unless you are going for exotic and/or illiquid underlying investments. A single multi-asset fund should be good enough for most people. Once the overall investment becomes large (7 figures USD), it can be split into ~4 for efficiency and taxation reasons but up until that point the gains are not really all that meaningful.

If your concern is the risk of “putting all eggs in one basket”, I don’t see that. One fund here often holds thousands upon thousands of different stocks and bonds, so you get all diversification you can possibly need in a single wrapper. In the unlikely event that the fund provider goes bankrupt, you still own your assets. And if the troubled provider actually steals from your assets, the state provides protection. It is possible that all of these levels of protection will fail, but then you will likely have other problems, like a nuclear war.

saver_ali

Splodge, I started off like you about 10 years ago with HL, dabbling with a small amount at first, and gradually increasing as I felt more confident. I only used funds (no individual stocks) but even so I probably had too many at first. I'm more streamlined now.

I've made the odd mistake, but I just think that's part of the learning process, and I'm proud of my overall performance.

I like HL because of the service, and their really good helpline. I appreciate that I could pay less charges elsewhere, but I'm happy for now.

The one thing I would say is beware HL's marketing hype. In the early days I followed some of the fund recommendations in their newsletters, to my cost. You only have to look at how they kept Woodford in their Wealth 50 list. (Luckily I got out of that before the serious problems.) I think their HL multi-manager funds are worst, where you're effectively paying double management fees, and the performance was worse than funds I'd selected myself.

Good luck, and I hope it all works out well for you!

kinger101

Deleted_User wrote: »

“Reversion to the mean” is a reference to long term growth rate of the overall stock market. This has nothing to do with individual stock. Most individual stocks fail over time.

It's actually a statistical phenomenon, and more correctly, "reversion toward the mean". It means than any random variable that lies at the extreme of a distribution is more likely to be closer the the mean on it's next measurement.

Obviously, stocks prices of fund managers performances aren't random, but do have an element of randomness. There's an element of luck in picking the stocks for a fund manager. And for an individual stock, certain factors in a companies performance are outside it's control. A company might do well one year merely because of currency movements.

splodge2001

Yes I realised about HL's marketing hype when I opened the account. It was the Woodford funds that really highlighted it. It was obvious they were marketing based on negotiated deals on fees rather than performance. When I opened the account Woodford was not yet a scandal but no one apart from HL backed it. Those multi manager funds are ridiculous. I looked at their advice but compared it to everyone else's too. I think Lindsell Train, Malborough Nano Cap and Baillie Gifford Managed were all from their list. I have dumped Pyford (on HL's recommendation list) which was no good.