Critique my IT SIPP Please

Croeso69

Intend on drawing £18,000 pension from this crystallised SIPP in the next couple of years. Dividends amount to over £24.000 so the drawdown is covered. 

Theoretically I could use accumulated cash to buy another IT to boost the incone so if anyone can suggest something that complements these that would be great.

Lindsell train bought during last year's first covid panic so showing a nice gain.

Data from theaic website.

squirrelpie

What's the actual total invested? Sorry, too lazy to do the sum.

Croeso69

squirrelpie said:

What's the actual total invested? Sorry, too lazy to do the sum.

About £500k book value and current value.

Croeso69

squirrelpie said:

What's the actual total invested? Sorry, too lazy to do the sum.

About £500k book value and current value. Book value of all holdings deliberately the same, so basically equal weighting of £37.5k, give or take, in each trust.

Linton

In my view....
I like the fact you are taking income from across the world rather than relying on the UK.  You dont tell us the % value of the various funds so it's not possible to get a clear picture of where your money is invested
 - perhaps the number of UK equity income funds is unnecessarily high.  You will probably find you have a lot of duplication. Possibly UK equity as a % of the whole may be rather high.
 - I think it would be beneficial if you diversified beyond simple equities.  For example Infrastructure and corporate bonds could be considered.  There are some niche funds producing good income, particularly ITs.  Though in all these cases you should check that good income is not linked to steady loss of capital value.
 - Is this your total pot?  If so I dont think it is a good idea to put all your eggs in the income basket.  A non trivial % of high growth funds to balance against and to top up the income funds would be beneficial.
 - restricting yourself to ITs is an unnecessary constraint

Croeso69

Linton said:

In my view....
I like the fact you are taking income from across the world rather than relying on the UK.  You dont tell us the % value of the various funds so it's not possible to get a clear picture of where your money is invested
 - perhaps the number of UK equity income funds is unnecessarily high.  You will probably find you have a lot of duplication. Possibly UK equity as a % of the whole may be rather high.
 - I think it would be beneficial if you diversified beyond simple equities.  For example Infrastructure and corporate bonds could be considered.  There are some niche funds producing good income, particularly ITs.  Though in all these cases you should check that good income is not linked to steady loss of capital value.
 - Is this your total pot?  If so I dont think it is a good idea to put all your eggs in the income basket.  A non trivial % of high growth funds to balance against and to top up the income funds would be beneficial.

Thank you. 

Each trust is equal weighting book value. 

I have a £12,000 pa pension in payment early as I was approaching LTA and I have another SIPP elsewhere (much smaller, uncrystallised) which is invested in funds like Fundsmith, LT Global, Blue Whale and Rathbone Global Opps. I dont have much LTA left so that SIPP will remain untouched until age 75 forces my hand. I am currently 57. 

I have less than 5% LTA left but the uncrystallised funds are approx 20% LTA so going to take an LTA charge there at some point.

NedS

Linton said:

 - Is this your total pot?  If so I dont think it is a good idea to put all your eggs in the income basket.  A non trivial % of high growth funds to balance against and to top up the income funds would be beneficial.

Agree with Linton. You mention taking £18k of income but the portfolio is generating £24k. If the target is £18k of income, I would consider rebalancing some funds into maybe a cheap global ETF tracker (e.g, HWMO) which should hopefully give good growth and still pays a well diversified 2% dividend yield.

Croeso69

NedS said:

Linton said:

 - Is this your total pot?  If so I dont think it is a good idea to put all your eggs in the income basket.  A non trivial % of high growth funds to balance against and to top up the income funds would be beneficial.

Agree with Linton. You mention taking £18k of income but the portfolio is generating £24k. If the target is £18k of income, I would consider rebalancing some funds into maybe a cheap global ETF tracker (e.g, HWMO) which should hopefully give good growth and still pays a well diversified 2% dividend yield.

Thanks. As I dont plan to take any income for two years there should be another £50k in there to buy some growthy stuff. I was thinking £18k pa would be a safe amount to withdraw (3.5%) and give a total income of £30k.

I also have £100k in cash deposits left from my PCLS which is going to be drawn down as required as a pseudo state pension over 10 years. Half is in premium bonds and the rest split over instant access and 1,2,3 year fixes of £10k each in Hargreaves Active Savings.

I have a share ISA with Hargreaves which I am ignoring here. That is spread over 35 investment trusts split between income and global growthy stuff. This is for topping up pensions if needed and any care required or other extras required due to ageing.

Croeso69

I should add that it has taken 33 years of employment and investing to build up these assets. When i finally retire (in two years time) it is going to be very difficult to switch from saving mode to spending mode.

Thrugelmir

How has the capital performed in the corresponding period?  Income is only one side of the equation. 

Croeso69

Thrugelmir said:

How has the capital performed in the corresponding period?  Income is only one side of the equation. 

Performance - a bit 'meh' generally.

Dividends reinvested to buy more of the same, so whilst book value = current value overall (give or take) about a third of the current value is past dividends reinvested since I started this SIPP in October 2006. The other two thirds is contributions (as a former contractor) plus a transfer in from an old employer DC scheme (post contracting) when they closed that scheme after a few years and replaced it with a cheaper (lower AMC) DC scheme that was auto-enrolment friendly (not sure why the old scheme wasn't).

Merchants Trust is now cheaper than when bought in 2013 and 2015 but the dividends have more than compensated for this. Only Aberdeen Standard is underwater including dividends received.

Prefer the choice of a SIPP to a limited range of life insurer funds that the last two DC schemes provided.