SIPP Allocation

zagfles

Have a look at Monevator etc - if you think you're not up to choosing your asset allocation, rather than choosing a FTSE 100 fund which is very narrow consider getting a multi-asset fund where all the asset allocation is done for you.

[Deleted User]

Multi-asset funds are good and have the advantage of simplicity but for someone disciplined and comfortable with ETFs, the latter have certain attractions: 
- noticeably lower costs
- more flexibility in selecting allocations
- more flexibility in picking better vehicles 
- ability to better manage rebalancing (eg by allowing some momentum gains)
- certainty that allocations won’t be changed on your behalf

RD42

Thank you all for taking so much time to review this and give me your your input, I will address all in one go here:
LTA (georgehere, others):  
My part of the pension is around £430K and my wife's is currently £70K.  If it looked like I would breach the LTA then I would start to put money into my wife's pot. (I am not doing this now because she is not a higher rate tax payer). Whilst I expect to put £40K into my pot this year, taking it to £470K (+ any gains) that will probably be my last big contribution to my pension. I think it would need to grow at 8% over the next 10 years (before I drawdown) to hit the LTA (which would also be increasing). A nice problem to have! But noted: Yes I need to watch out for this.
Allocation (dunstonh):
Where is Asia and Emerging Markets? :  I agree, I will see if I can find a Asia (inc Japan) / Emerging markets fund.
Why split between large cap and medium cap on the UK but not small cap? :  FTSE100 / FTSE 250 were the onlytwo ETFs that Vanguarded offered for the UK.  I would happily add another fund, or take a suggestion that combines FTSE 100,250 and small cap.
After over 25 years of under performance, why would you want to do that (put all int FTSE 100)? I guess I don't really, just that the £20K / year dividend income (£500K @ 4%) pretty much matches what I would want to draw down from the fund when I retire.
Regarding Bonds:  I have never really understood the bond / gilt market, they seem such poor value, but have had good returns.  Most pension funds seem to have an allocation in bonds as a "safe", less volatile than shares place for some of the fund, so I would be looking for that (low volatility).   
Fund Selection(Mordko)
Reason for the funds I selected originally:  I want low cost funds (I think I have achieved this).  I am looking for a mixture of safety and growth. So, the selection I have is 40% US (Growth) , 15% UK (Value), 7.5%  Europe (Value), 7.5% Japan (Value), 20% Gold (Safety) / Cash (Will invest in case of large fall in market), 10% Fixed income (I am unsure if I need this, given so many pensions and company funds seems to have a large proportion of bonds, is is a mistake not to have any?). 
Excluding Japan (redpete)
Doh! - I big mistake that the Japan fund I selected excludes Japan!  I like the "Dev Euro (excl UK)" and "Dev Asia (incl Japan)" suggestions.
Bonds (dunstonh)
Global bonds are generally out of favour at the moment as a rise they don't offer much downside and a rise in Sterling could hit them hard.   : I think I will give up on Bonds / Gilts.  I vaguely understand them as instruments, but I don't understand the market in them at all (like why gilts with negative returns are being bought on the basis that central banks will buy them back etc.)
Different Allocation (AnotherJoe)
Gold: Yes, this is what I already own (same with Amazon, Microsoft).  Cash would be for opportunities, then for draw-down.
Risk (British Investor)
How much risk : 
a)Ensure Pot is not exhausted:  Yes, I think I am covered here, our current living expenses are not high and I model the planned withdrawals / expenses etc.  We have the option to downsize considerably, and will perhaps be getting decent size inheritances (not relying on them!).
b) Poor market outcomes:  I am not sure what my other options would be?  I have a more than average ( I think) allocation to gold / cash that I would hope would see me through a period of this, hoping that growth will return.  What would my other options be?
multi-asset fund (zagfles, Mordko)
I will look into this, but I am pretty comfortable making these choices (except around bonds!)
--------------------------------------------------------------
Thank you all, my revised allocation:

US Shares 1 (FTSE)	15.0%
US Shares 2 (S&P)	15.0%
UK FTSE 100	5.0%
UK FTSE 250	5.0%
UK Small Cap	5.0%
Asia (exc Japan)	5.0%
Emerging Markets	5.0%
Europe (Ex UK)	15.0%
Japan	5.0%
Other	10.0%
Gold	10.0%
Cash	5.0%

 I need a suggestion for a "UK Small Cap" fund, preferably a ETF.  

[Deleted User]

Good guidance on searching ETFs: https://monevator.com/how-to-find-exchange-traded-funds/

You can use iShares MSCI UK Small Cap UCITS ETF (Acc). A bit expensive but if you want to slice and dice UK, then you have little choice. 

Alternatively there is a single UK ETF that could work, eg SPDR FTSE UK All Share UCITS ETF

In my opinion you need bonds as you start approaching retirement. A major event at the wrong time can introduce sequence of returns risk and bonds help to deal with it. I would have most of my bond allocation in UK government bonds (gilts). In times of major trouble and currency fluctuations this asset will provide the much needed cushion. You don’t need the returns from your bonds. You need safety in times of crisis. 

BritishInvestor

RD42 said:

Thank you all for taking so much time to review this and give me your your input, I will address all in one go here:
LTA (georgehere, others):  
My part of the pension is around £430K and my wife's is currently £70K.  If it looked like I would breach the LTA then I would start to put money into my wife's pot. (I am not doing this now because she is not a higher rate tax payer). Whilst I expect to put £40K into my pot this year, taking it to £470K (+ any gains) that will probably be my last big contribution to my pension. I think it would need to grow at 8% over the next 10 years (before I drawdown) to hit the LTA (which would also be increasing). A nice problem to have! But noted: Yes I need to watch out for this.
Allocation (dunstonh):
Where is Asia and Emerging Markets? :  I agree, I will see if I can find a Asia (inc Japan) / Emerging markets fund.
Why split between large cap and medium cap on the UK but not small cap? :  FTSE100 / FTSE 250 were the onlytwo ETFs that Vanguarded offered for the UK.  I would happily add another fund, or take a suggestion that combines FTSE 100,250 and small cap.
After over 25 years of under performance, why would you want to do that (put all int FTSE 100)? I guess I don't really, just that the £20K / year dividend income (£500K @ 4%) pretty much matches what I would want to draw down from the fund when I retire.
Regarding Bonds:  I have never really understood the bond / gilt market, they seem such poor value, but have had good returns.  Most pension funds seem to have an allocation in bonds as a "safe", less volatile than shares place for some of the fund, so I would be looking for that (low volatility).   
Fund Selection(Mordko)
Reason for the funds I selected originally:  I want low cost funds (I think I have achieved this).  I am looking for a mixture of safety and growth. So, the selection I have is 40% US (Growth) , 15% UK (Value), 7.5%  Europe (Value), 7.5% Japan (Value), 20% Gold (Safety) / Cash (Will invest in case of large fall in market), 10% Fixed income (I am unsure if I need this, given so many pensions and company funds seems to have a large proportion of bonds, is is a mistake not to have any?). 
Excluding Japan (redpete)
Doh! - I big mistake that the Japan fund I selected excludes Japan!  I like the "Dev Euro (excl UK)" and "Dev Asia (incl Japan)" suggestions.
Bonds (dunstonh)
Global bonds are generally out of favour at the moment as a rise they don't offer much downside and a rise in Sterling could hit them hard.   : I think I will give up on Bonds / Gilts.  I vaguely understand them as instruments, but I don't understand the market in them at all (like why gilts with negative returns are being bought on the basis that central banks will buy them back etc.)
Different Allocation (AnotherJoe)
Gold: Yes, this is what I already own (same with Amazon, Microsoft).  Cash would be for opportunities, then for draw-down.
Risk (British Investor)
How much risk : 
a)Ensure Pot is not exhausted:  Yes, I think I am covered here, our current living expenses are not high and I model the planned withdrawals / expenses etc.  We have the option to downsize considerably, and will perhaps be getting decent size inheritances (not relying on them!).
b) Poor market outcomes:  I am not sure what my other options would be?  I have a more than average ( I think) allocation to gold / cash that I would hope would see me through a period of this, hoping that growth will return.  What would my other options be?
multi-asset fund (zagfles, Mordko)
I will look into this, but I am pretty comfortable making these choices (except around bonds!)
--------------------------------------------------------------
Thank you all, my revised allocation:

US Shares 1 (FTSE)	15.0%
US Shares 2 (S&P)	15.0%
UK FTSE 100	5.0%
UK FTSE 250	5.0%
UK Small Cap	5.0%
Asia (exc Japan)	5.0%
Emerging Markets	5.0%
Europe (Ex UK)	15.0%
Japan	5.0%
Other	10.0%
Gold	10.0%
Cash	5.0%

 I need a suggestion for a "UK Small Cap" fund, preferably a ETF.  

You are proposing a portfolio containing ~75% equities. Is this optimal for you, i.e would a portfolio containing only (for example) 50% equities give you sufficient long-run returns to ensure you don't run out of money? Are you taking more "risk" (risk in the sense of your portfolio falling further during market turbulence) than you need to?
This might be a useful read in terms of market shocks.
https://finalytiq.co.uk/lessons-118-years-capital-market-return-data/
These days, when you can purchase equity funds that broadly cover the investable universe (small to large cap, developed and emerging) I'm not sure why you need many funds.

NedS

Not an ETF, but for UK small caps I really like SLS Investment Trust. I think small caps is an area where active stock selection can really make a difference.

Thrugelmir

RD42 said:

 I need a suggestion for a "UK Small Cap" fund, preferably a ETF.  

Go active, likewise for Asia and Emerging markets. Some sectors ideally need hands on management to avoid the pitfalls. 

[Deleted User]

“Whether markets are efficient or inefficient, active investors as a group must fall short of the market return by the amount of the costs they incur”.  This equally applies to small cap stocks and Asian markets. 

DairyQueen

Deleted_User said:

“Whether markets are efficient or inefficient, active investors as a group must fall short of the market return by the amount of the costs they incur”.  This equally applies to small cap stocks and Asian markets. 

The definition of 'small caps' is relative. In the US, for example, a 'small cap' could range from a multi-million to a multi-billion dollar market valuation. 

To gain sufficient exposure to a reasonable number of the world's small caps an index would need to hold hundreds of thousands of individual companies. Imagine the logistics of tracking such an index. Even an index specific to one market would experience the same issue. 

IMHO small caps are one area where active fund management is required. I hold several market-specific actively-managed small cap funds. These satellites compliment my core global passives.

[Deleted User]

To gain sufficient exposure to a reasonable number of the world's small caps an index would need to hold hundreds of thousands of individual companies. 

Why? To get exposure you just need one stock from a sector and a sufficient allocation to make it meaningful in the context of your portfolio.

I hold VBR (about 1000 stocks, small value) and VTI (3500 stocks). Covers companies from $20M market cap. Thats small enough for me. Holding VTI costs 0.03% per year. Active small cap funds tend to cost 1%. Thats a big drag. Can they beat passive? For sure. A minority of them will. Sadly, I dont know in advance which ones