What am I doing wrong?

Heisenberg01

I have a small sipp that I'm Look after myself, nothing major around 50k.

I'm in 2 funds, fundsmith and Baillie Gifford which have ticked along nicely and are overall doing ok despite recent global  local events.

However everytime the Dow has a big jump I take a big hit I thought these funds tracked the Dow, but today I'm overall 2% down when the dows had a blinder.
Please be gentle.

H

Prism

Todays price is based on yesterdays moves in the stock market. Your investments don't track the Dow Jones and have very little in common with it. Also, the pound has been rising significantly vs the dollar in the last few days and a good % of those funds are priced in dollars which means your investment is worth less. You never said which Baillie Gifford fund you are invested in.

Thrugelmir

Exchange rate movements need to be monitored as well. Over the past 5 days the exchange rate has moved 3.2% negatively for UK investors of $ stocks. 

Gary1984

The Dow Jones is a weird index in that it tracks a small number of fairly random companies and takes no account of market cap. I don't think it would be appropriate to benchmark your funds against it. 

Heisenberg01

Hallie Gifford American.

Wis I could just move it all to reflect the usmarket.😧.It's a nightmare .

I'm glad pros will manage my DB transfer.

Heisenberg01

Without sounding stupid, can I just invest my small sipp following the Dow?

gm0

First answer the question (for yourself) *why* you want to follow the Dow index specifically (within the US market) rather than just perhaps having a position of wanting to hold US stocks in your pension.

Any global equities index tracker will have about 50% US in it. Most of that will be large cap (J&J, Alphabet, MSFT etc).  Because of market size relative to the others. 

All providers will have a choice of passives that do that for "all equities" or as mixes of bonds and equities i.e. Vanguard VLS40/60/80/100 and similar. 

If you wanted "all US" that's available too. Single country funds.  A lot of US investors don't go overseas. But for most of us here the desire to reduce risk via diversification means we don't want 100% in a single country fund.

mark55man

if the forex movements unnerve you, then you can buy funds that hedge that risk from a UK perspective, but it all adds to the cost.  on the other hand, every £ you now invest will get you 3% more US stocks (not sure if you actively contributing or just nursing a pot along)

going with US is not the worst plan in the world, but it is a little unbalanced - no property, no protective assets (gold, bonds), no geographic diversity.  but if I had to choose a single country to invest in US would definitely be on the list - Imean what's the worst that could happen -uncontrolled pandemic, civil unrest, unstable politics, .... and its still not doing terribly 

georgehere

H_01 it seems from your language (but not your name) that you don't enjoy uncertainty.
However, things are possibly about to get more uncertain for you "I'm glad pros will manage my DB transfer" in that more money will be invested alongside the 50k and become subject to movements in fund values.
As 'pros' are involved, consider asking them for recommendations for funds in your SIPP that are designed to show less volatility and more likely just to "tick along", if that ultimately suits your temperament and investing tolerance and still allows you to meet your goals. Peace of mind is not something to be taken lightly, especially in a lengthy retirement.

torrence

As others have suggested, don't fixate on the Dow. I'd suggest you are better off investing in a low cost global index tracker. First you'll save fees, and although saving 0.5% or whatever doesn't sound a lot, if for the sake of argument average market returns were 5% then saving 0.5% is 10% of the gains. Compound this over many years and fees matter. Also a global index tracker will be around 50% US stocks, so you'll get most the benefit. If you're investing for the long term don't fall for the idea that the US market always outperforms other markets, historically the US has sometimes under performed for long periods. A global index tracker gives you exposure to emerging markets, and all things move in cycles so you want to hold a bit of everything.

[Deleted User]

mark88man said:

if the forex movements unnerve you, then you can buy funds that hedge that risk from a UK perspective, but it all adds to the cost.  on the other hand, every £ you now invest will get you 3% more US stocks (not sure if you actively contributing or just nursing a pot along)

Why would you be getting 3% more stock?