Transfer medium size pot entirely to VWRL (or similar)?

Chickereeeee

Over the years I have built up a fair amount in investments, mostly in selected funds, ITs  and ETFs. I have gradually  moved more into trackers over time, and understand the supposed benefits, but something is stopping me from just converting the whole lot into VWRL, for example. If I did, it would be easier to draw down (no need to select which fund to sell), record all divi income, and balance cash holdings. Dividend returns would seem to be similar to my current mix of growth and high divi funds. I think I beat a global tracker (when going up) by a % or 2, but on recent drop, tracker beat me by a percent. I am not really that interested in managing a portfolio of many funds if a simpler one would do the job.
Has anybody else got a seven figure sum in just one, diversified, ETF/fund?
I know it's diversified, but still seems a low  number of baskets for the number of eggs.
(My holdings are across SIPPs,  ISAs and unsheltered accounts. The portfolio is a mix of equities, and a large cash holding. Getting full state pension next year, have a couple of small DB pensions in payment)
Any thoughts welcomed.

k6chris

Supplemental question, what are the risks of having a seven figure sum in one ETF??

jamesd

ETFs and ITs are shares and have no FSCS protection. Pension funds have unlimited FSCS protection. Ordinary funds inside a pension have normal FSCS protection. The protection doesn't cover normal price variation but does cover insolvency and fraud at the fund house and pension provider.

pjread

I think there's an argument for having multiple providers/platforms/investments.  I suspect the chances of actually losing anything due to platform/broker/fund issues is very low, but it's not inconceivable that there might be periods where access became more difficult (from technical issues downing a platform for a day to legal action freezing market access for an investment for several weeks/months)

So it seems almost certainly unnecessary but nonetheless not imprudent to have at least a couple of funds on a couple of platforms (and possibly a handful of direct shareholdings if you're that way inclined).  Might skew returns by 0.03% but that could be up or down & it makes me sleep better at night as the values creep upwards.

[Deleted User]

The platform risk is something I am getting worried about, its not the insolvency, as mentioned above, it might be a outage that causes problems with drawdown payment.
Saying that, if I was with an IFA on say the Elevate platform - I wouldn't worry or even think about it

AnotherJoe

You might want to consider a smaller companies fund (or ETF, IT or whatever) to increase diversification. Ive got 6 figures in one SIPP split roughly 75/25 that way, VRWL equiv and small cos (which arent small at all of course).

However that's my "long term kids inheritance SIPP" so i never get into rebalancing, drawing down or anything like that. And as a SIPP I dont care about dividends from a tax POV (they are Acc funds anyway)

And i have other SIPP and ISAs where i indulge my dabbling behaviour (not too much). One reason for going that way might be if you had a spouse who wouldnt be able to cope with the detail, you could either change in anticipation or leave instructions like Warren Buffet, "on my death transfer everything into tracker X".

Linton

How would you feel about a £400K fall in value in the next crash?
What is your pension pot mainly for - an inheritance for the kids or for ongoing income?
If both I think I would split the money with the kid's inheritance in something like VWRL in the SIPP which could be left to rise and fall without causing concern and the rest in something relatively cautious so I could drawdown steadily without worrying too much about cash buffers and avoiding drawing down when markets fall.

PS seven figures isn't what I would call a medium sized pot.

Chickereeeee

Thanks for replies

Platform risk: I am diversified over two platforms

Smaller companies: would not an All-Cap fund cover that? Also, I think small-caps, in general, offer higher returns with higher volatility.. Not necessarily what I would be looking for.

@Linton: thanks for the reply, but your answer addresses a different issue, volatility. A valid concern, but the question then just becomes: "should I stick all into ONE cautious fund?" for ease of management etc (and then which one, of course)

Linton

Chickereeeee said:

Thanks for replies

Platform risk: I am diversified over two platforms

Smaller companies: would not an All-Cap fund cover that? Also, I think small-caps, in general, offer higher returns with higher volatility.. Not necessarily what I would be looking for.

@Linton: thanks for the reply, but your answer addresses a different issue, volatility. A valid concern, but the question then just becomes: "should I stick all into ONE cautious fund?" for ease of management etc (and then which one, of course)

Matching portfolio structure and objectives is a different issue than the one your raise of ease of management.  However I think, that it is of greater importance.  It therefore makes sense to sort it out first. I believe that a cautious fund is not the best vehicle  to provide good long term growth and a growth focussed fund is not the best vehicle to provide a steady income.  If you do have these two different objectives you should end up with two (at least) funds anyway.

Bearing in mind you have 3 separate portfolio environments  with your SIPP, S&S ISA, and unsheltered investments with the resultant difficulty of transferring funds and money between them I cannot see that having all 3 running the same fund or different funds actually makes very much difference to the ease of management.  And it doesnt matter very much whether they are all on the same platform or not.  Each has to be managed separately anyway.

As to security, in practice I dont think it's a major issue, but perhaps you would sleep better knowing that you were using 2 separate platforms.  A fund is a lesser concern as long as you stick to the mainstream, which is clearly what you will do.  Again although it may not be completely rational using different funds on the 3 different environments may make you happier.

Chickereeeee

I dont really mind if its 1, 2 or 3 funds, if there is argument for it. That would be a significant reduction anyway....
I do suspect that a split between two funds, one growth and one income focussed, could well give a similar result to having the same total amount in a market tracker. 

Linton

Chickereeeee said:

I dont really mind if its 1, 2 or 3 funds, if there is argument for it. That would be a significant reduction anyway....
I do suspect that a split between two funds, one growth and one income focussed, could well give a similar result to having the same total amount in a market tracker. 

In overall allocations, possibly, but quite different in management terms.  You can basically ignore a long term growth fund whereas you cant ignore the investments that are providing your income.  Also, managing payments from a SIPP can be a bit of a pain whereas from an S&S ISA or unsheltered it can all be easily done online. Conversely keeping your "for the kids inheritance" money in your SIPP could be IHT tax advantageous.