How many funds in a SIPP?

WindInHerHair

Hello,
I have just transferred out my pension to a new provider and am in the process of selecting funds to invest in a SIPP. I understand that if I choose too many funds, the pot will be overly diversified. How many funds should I select for a pot worth approximately £91K? Many thanks for any advice.

Albermarle

If you pick a multi asset fund than probably only one . Otherwise max 5 ?

Thrugelmir

What funds do you have in mind? 

WindInHerHair

Baillie Gifford American B Acc and Baillie Gifford Positive Change C Acc

dharm999

WindInHerHair said:

Baillie Gifford American B Acc and Baillie Gifford Positive Change C Acc

I have 8, split between UK, Europe, Global, emerging markets, property, gold, and bonds, in differing weightings.  The equity to non equity split (where that is bonds, property, gold), is 55/45. Probably a bit light on the equities, but I am comfortable with that.  All are low cost trackers, with an overall cost of just under 0.3% a year.

I based the equity funds I invested in on the Interactive Investor low cost growth model portfolio, but not in the same proportions.

Thrugelmir

Both funds have Tesla and Illumina in their 10 ten holdings. Likely to be further duplications as well.  To say it is US centric is understatement! 

The aim of well a diversified portfolio is not to find the best performers , but to (as far as possible) consistantly deliver a positive return. 

You have no exposure to a whole variety of sectors. 

Marcon

WindInHerHair said:

I understand that if I choose too many funds, the pot will be overly diversified. 

If you understand what the issue is with over-diversification (i.e. funds overlap/duplicate, meaning you could take a hit on returns), then all you need to do is ensure you pick funds which don't fall into that trap. How many you pick is up to you, but with under £100K in the pot, you shouldn't need more than a few to meet your investment objectives.

WindInHerHair

So, for £91K, would it be best to go for one or two multi asset funds with a larger geographical spread? I wanted to include a fund that invests responsibly. Do you have any pointers on this?

dunstonh

How many funds should I select for a pot worth approximately £91K?

if you pick multi-asset then you need just one.   If you are building a portfolio of single sector funds, then it will depend on your strategy.

Baillie Gifford American B Acc and Baillie Gifford Positive Change C Acc

In which case you are probably looking at between 10 and 15 if you want to include those.  BG American is a higher risk fund and makes a good satellite fund for US equity but not necessarily a good core fund.     Positive Change  would suggest you have some socially responsible feelings but that doesnt go with BG American.   So, what you made you look at this?

Prism

If you like Baillie Gifford then consider their managed fund

Thrugelmir

WindInHerHair said:

So, for £91K, would it be best to go for one or two multi asset funds with a larger geographical spread? I wanted to include a fund that invests responsibly. Do you have any pointers on this?

In no way a recommendation. However something to read. 
https://www.ishares.com/uk/individual/en/themes/sustainable-investing/navigate-our-range