SIPP/ portfolio advice

HTM1985

Courtesy of a far-sighted and tax conscious father, I have some money in a SIPP (approx £135K). This is split between five Unit Trusts. I am a 35 year-old teacher and therefore fortunate to have access to the Teachers’ Pension Scheme.

The SIPP is held via interactive investors. I am very minded to do what I have done for the last 15 or so years and ignore it entirely. I would, though, like to engage with two things. 

1. I’m a little uncertain about the interactive investors charging model. I see to pay £9.99/month and then receive a trading credit worth £7 that elapses after three months. Given that I would not envisage trading monthly (or anything like it), presumably this is a suboptimal arrangement. What alternative hosts would people here recommend?
2. If I were to keep the SIPP with interactive investors, I would like to think about whether the currently held 
3. UTs represent an appropriate portfolio. These are: 

A. Alliance Trust Ord (approx £11K)

B. F&C Ord (£18K)

C. JP Morgan Emerging Markets (£29K)

D. Schroder UK Midcap (£6K)

E. Scottish Mortgage (£75K)

I sense this would need some rebalancing but would like to have a think about doing this according to fairly simple, conservative, “best practice” type principles. 

Scottish Mortgage has obviously performed very well: would most advise reallocating some of this holding to some other area? If so, what seems to be lacking? And is this a fairly easy process through interactive investors? And, finally, would this incur charges? Are those £7 credits good for a trade irrespective of size?

I’m capable of learning but not really minded to become heavily involved in these decisions.

Any and all thoughts and advice welcome!

A_T

I'd be tempted to sell some Scottish Mortgage and buy into a global index tracker ETF like VWRP or SWDA - or maybe increase the F&C and Alliance Trust holdings. I'd leave the EM and Schroder trusts as they are.
As you have a Teacher's pension (DB I presume?) volatility might not bother you - if it does maybe buy into a broad bond ETF like VAGP.

I wouldn't worry about II's fees - you could probably get cheaper but hardly worth the trouble of moving for the amount you'd save.

AnotherJoe

It would hurt me to sell much SMT, to quote Zaphod Beeblebrox "those guys know where their towels at". And you've got another what at least 20 years to go for it to grow. Sure it will be volatile but you have time to ride it out. I'm holding mine indefinitely. I see a double from here over 3 or 4 years time.  

Maybe grudgingly on the grounds of prudence sell a third at most. 

I'd sell everything else and buy a global index fund and a fund focussed on renewable energy, Eg solar and wind. That's where the future lies. 

So three funds in total. 

HTM1985

Thanks A_T: that’s useful! I did think selling some Scottish Mortgage looked a good option. You’re right, too, about relative lack of concern re volatility. 

I’ll have a look at the two funds you suggested: were these suggestions generally based on the current holdings being too UK/ US centric and therefore more global exposure being desirable?

Thanks again!

Voyager2002

I think that there are more charges than this to an II SIPP. Personally I have my trading account with II but my SIPP with Fidelity for this reason. The process of switching takes twenty minutes (and about an hour to choose which provider offers the best deal) while the savings could well be 50 - 100 pounds per year, so worthwhile IMHO.

And yes, your trading credit can be used to pay for trades. The fee for buying or selling is the same no matter how large (or small) the transaction.

TBC15

Voyager2002 said:

I think that there are more charges than this to an II SIPP. Personally I have my trading account with II but my SIPP with Fidelity for this reason. The process of switching takes twenty minutes (and about an hour to choose which provider offers the best deal) while the savings could well be 50 - 100 pounds per year, so worthwhile IMHO.

And yes, your trading credit can be used to pay for trades. The fee for buying or selling is the same no matter how large (or small) the transaction.

The cost of an II SIPP not in drawdown is £19.99 PM. Trades are £7.99 up to £100,000 over that the price goes up to £40.

Looking at Snowman’s spread sheet II appears to be the cheapest. ( iWeb also comes in at £240pa)

Edit The price above was based on 12 trades per year. A couple of providers get cheaper if you don’t make many trades per year.

RetSol

AnotherJoe said:

.... a fund focussed on renewable energy, Eg solar and wind. That's where the future lies. 

Any suggestions for funds in this area, @AnotherJoe? 

Thrugelmir

ECOFIN GLOBAL UTILITIES & INFRASTRUCTURE TRUST PLC

AnotherJoe

RetSol said:

AnotherJoe said:

.... a fund focussed on renewable energy, Eg solar and wind. That's where the future lies. 

Any suggestions for funds in this area, @AnotherJoe? 

I hold INRG and TRIG. Not confident they are the best. What I selected about 18  months ago after some short research.  They are also very different, one growth, one basically income (Guaranteed 5% unless they get in trouble) plus possible but more modest growth. I was hedging my bets.  

I should probably re-evaluate now but better to be in than pontificate for longer.
oh, I nearly forgot I also hold Oersted. A company not a fund.

Comparative charts will show TRIG somewhat down compared to the other two but you can add 5% a year. Not my usual style (income) but I thought I'd give it a go, and it's essentially a solid 5% unlike what you'd get from a "normal" company. Not a bad one for the cautious. 

cloud_dog

HTM1985 said:

A. Alliance Trust Ord (approx £11K)

B. F&C Ord (£18K)

C. JP Morgan Emerging Markets (£29K)

D. Schroder UK Midcap (£6K)

E. Scottish Mortgage (£75K)

As these are all Investment Trusts (from what I can see) and if you are a low transaction investor, transfer the SIPP to Fidelity who would charge £45pa platform charge (£10 to buy/sell, and £1.50 for dividend reinvestment or regular purchases), or possibly AJ Bell YouInvest £100pa platform charge plus trading costs.

EdGasketTheSecond

If you are not trading then move your SIPP to another provider where the charges are lower. You would have to sell the funds and move cash as that is the most expedient way. Scottish Widows have a wide range of funds and no charges other than the fund management charges; switches between funds are free. They also make no charge when you take a pension lump sum.