Where to invest £1m to generate 10%+ income with some risk

fizio

I'll start by saying 'its a nice problem to have' and that I am in a fortunate position. Just retired in my late 50's and have a DB pension plus some property and no debts. This combination alone generates more than enough income for my needs inc normal holidays/treats etc - but by no means excessive. 
As a couple we have various investments through SIPP/ISA/etc and it roughly adds up to £1m. At the moment I am 50% in 'low risk' vanguard life strategy style funds and 50% cash. Now that I have a lot more time on my hands I am looking to get more 'hands on' and more adventurous with my investments. 
So I am researching as much as I can around managed funds, sectors, countries, etc to come up with a portfolio mix that will generate better than my global tracker. At this stage I am not looking at individual stocks. I will stay 50% in global tracker as a safety net. 
So the feedback I am looking for is suggestions around what kinds of portfolios other people have - who are looking for that 10-20% growth (with downside risk) and are fairly active. I have read about funds in US tech, US growth, china growth, semi-conductor and other specialist etf's etc 

dunstonh

Where to invest £1m to generate 10%+ income with some risk

That title alone gives a lot to be concerned about.   "with some risk" but want 10%.  Some suggests "some" but not very much.  So, basically not possible.

 I will stay 50% in global tracker as a safety net. 

A risk 9 out of 10 (adventurous) fund is not exactly a safety net. 

So the feedback I am looking for is suggestions around what kinds of portfolios other people have - who are looking for that 10-20% growth (with downside risk) and are fairly active.

It doesnt exist.

 I have read about funds in US tech, US growth, china growth, semi-conductor and other specialist etf's etc 

The sort of stuff that can lose 90% of its value in no time.

ratechaser

Well as has been pointed out to me already, VLS80 is returning >10% annualised based on the past 5 years. So if that's where you are parked then job done (you mentioned that Vanguard is low risk, not sure many on here would agree, even VLS20 is far from a safe haven)

Maybe take 5-10% of your portfolio and stick it in crypto if you are looking for a bit more of a thrill...

dunstonh

Well as has been pointed out to me already, VLS80 is returning >10% annualised based on the past 5 years. 

a 5 year growth period with Sterling falling is not a good guide to future returns.

Linton

In my view your aims are unrealistic and apparent strategy unworkable.  Apologies if I have misunderstood what you are saying, but....

Sustainable 10% income with long term inflation matching is not something you can sensibly aim for from quoted share investments.  You may get it for limited time periods, but that will be balanced by major falls when taking 10% income will eat into the core assets.

The problem I see with the approach of choosing a range of specialist ETFs is that with the amount of money at your disposal cherry picking niche investment areas is not really practical.  You would either have to pick a large number which would dilute the benefits even if you were to a better than random extent able to identify the right ones or you would have to put a very large amount of money into individual areas.  Would your really put say £200K into green energy?  Better in ny view to modify a reasonably balanced 100% equity portfolio and add extra potentially higher growth but large areas such as Small Companies, SE Asia etc. 

If you were successful in your aim what would you do with £100K/year income beyond paying a lot of tax?  Annual luxury world cruises would pall after a while.  A new top of the range car each every year?  Better to approach things the other way around and aim for an income at a level you could use and then determine how you can achieve it at minimum risk.

It may be that you simply have far greater wealth than you can sensibly use in your lifetime.  So why not release money to your future beneficiaries now?  Donations to charity perhaps.  If you want to use your money for yourselves perhaps up-size or up-locate your house.  Unless I have misunderstood you, you seem to be saying that since you have far more money than you can use it may be fun to make some wilder investments.  Surely if having fun was your aim you could think of something better to do than sitting at your computer screen watching your investments rise in value.

Sorry, after rereading my post it sournds rather harsh, but hopefully some of the points are useful.

Thrugelmir

ratechaser said:

Well as has been pointed out to me already, VLS80 is returning >10% annualised based on the past 5 years. 

Once the impact of the June 2016 referendum starts to drop out of the 5 year historical data figures. Will look far more mundane. Then there's the downside that GBP may even strengthen further. 

Marcon

Invest in storage pods in a rain forest?

Stubod

..I know a chap in Nigeria that may be able to help???

Linton

ratechaser said:

Well as has been pointed out to me already, VLS80 is returning >10% annualised based on the past 5 years. So if that's where you are parked then job done (you mentioned that Vanguard is low risk, not sure many on here would agree, even VLS20 is far from a safe haven)

Maybe take 5-10% of your portfolio and stick it in crypto if you are looking for a bit more of a thrill...

The past 5 years are not average.  Taking a longer view....

Since 1994 when Trustnet records start the FTSE World index has averaged 8.5% annual return.  In the first 17 tears it averaged 6.7% annually ( 2.9% inflation) and the past 10 years 10.5% (2.5% inflation).   

dunstonh

In the first 17 tears it averaged 6.7% annually and the past 10 years 10.5%.   

And the past 10 years include the recovery from the credit crunch but not the actual credit crunch itself where markets fell around 40-45%.   That would account for a lot of the extra compared to the long term average.   

Albermarle

What is the point or pursuing more money than you need just for the sake of it?  Why change the apparent habit of a lifetime and suddenly take that sort of financial risk?

This is the key point I think . I think there might be an element here of FOMO. The OP maybe does not want to look back in a few years time and see what returns they could have made if only they had taken more risk. But as you say if you have more than enough money in the first place , why aim to get maybe get more money that you do not need by taking a risk with the money you already have.