SIPP fund choice

noclaf

NedS said:

noclaf said:

Thanks NedS, this is helpful....maybe I go with just above £100 for the cheap fund. Then move the remaining cash into HMWO, leaving a small balance to cover first QTR as you suggested. I will likely invest in HMWO using a single transaction to keep trading costs to a minimum rather than use drip-feeding, expect a small balance will remain as only whole ETF units can be purchased.

regarding total annual charges I'm wondering if they will exceed £45/annum due to HSBC's ETF charges, 0.15% for HMWO?
Not certain but I think the dividends can be reinvested for 1.50 per transaction if using the regular investment service.

The 0.15% fund changes for HMWO will be deducted from either capital or income within the ETF, so this will be transparent to you and you will never see this happening (ths reflected in either the capital gain or dividend paid). The only fees you will 'see' and be responsible for paying is the Fidelity platform fee, capped at £45/year for the ETF plus a small fee to cover the cost of the fund you stick £100 into (0.35% per year, so 35p or around 3p per month if you have £100 in the other fund).

Ok, that makes life a lot easier.....I tend to use both the fund fee and platform charges when projecting future charges.

Alexland

My wife has been holding just HMWO in her Fidelity SIPP for a few years (and done very well from it) and it's unit price of around £23 is almost perfect for replenishing the cash balance even when auto-reinvesting dividends at £1.50 per quarter. That's because the reinvestment can only buy whole ETF units so there's always a little bit of cash left over, on average half the unit price £11.50 which is roughly the same as the Fidelity charge of 3x£3.75 per quarter = £11.25. She still keeps around £100 cash balance so as not to run it too tight as some quarters there is only pennies left from a dividend reinvestment and sometimes there is almost enough to buy another ETF unit.

I hold VEVE in my Fidelity SIPP and at around £66 per unit the spare cash from divi reinvestment into whole ETF units gradually builds up which is annoying as I'm too tight to want to occasionally spend £10 to manually reinvest even on my largest account. I just stick the excess cash in one of their discounted tracker funds and pay the 0.2% wealth platform fee until it might one day be big enough to be worth reinvesting in more ETF units

Last year I stopped holding an EM fund via my workplace pension as I didn't want to be supporting China, Russia, India, etc. Developed World is fine for us.

noclaf

Hi Alexland, 

I recall you mentioned on other threads re removing your EM exposure. I did something similar albeit mainly due to my concerns with the direction of the West Vs China relationship and the general course China has been taking....never factored in Russia! I do still have EM exposure via FTSE Global All CAP in my S&SISA but it's not much (relatively) and my larger primary pension is exclusively Dev world funds.
 
Fidelity investments; I picked HSBC FTSE All World fund for my son's JISA and HMWO in my SIPP....however must admit I couldn't not resist the urge to tinker and added a few smaller holdings in a couple of LG funds in the SIPP...HMWO still represents circa 60% of the SIPP. VEVE is cheaper but as I have a couple years worth of my S&S LISA in VEVE preferred to add some variation and avoid concentrating my investments in a single fund/etf.
I may take a similar approach and top up the cash mgnt ac + reinvest the divi's. 

Alexland

noclaf said:

I may take a similar approach and top up the cash mgnt ac + reinvest the divi's. 

I prefer paying SIPP fees from within the account (technically Fidelity move the right amount from the SIPP into the Cash Account each month) as the contributions will have benefitted from tax relief (and avoided NI as we transfer lump sums out of salary sac workplace pensions every few years) and so it costs us less. I would also prefer to slightly erode the value of the SIPP due to LTA risk.