Stick it all in Fundsmith SIPP???

beeza650

I have this illustration of the performance of all the different pensions I have. 
No idea what the top L&G line is though as I don't think my IBM pension has done anywhere near that well.
What I'm seeing though is Scottish Widows, where the bulk of the money is, is not a great performer.
Does anyone know typically strong performing pension funds I should maybe be moving across to?
I intend to retire in 10 years.

Thanks

dunstonh

Stick it all in Fundsmith SIPP???

Fundsmith doesn't have a SIPP.

What I'm seeing though is Scottish Widows, where the bulk of the money is, is not a great performer.

A number of the funds in the list are not comparable.  That fund is lower risk than a bunch of them.

Does anyone know typically strong performing pension funds I should maybe be moving across to?

As it stands, you are not really in a position to make that decision as you have more learning to do.  You have picked some random funds investing in different areas with different risk levels and are trying to compare on the basic of past performance during a pretty volatile period.  That is not how you pick funds.

Marcon

beeza650 said:

I have this illustration of the performance of all the different pensions I have. 
No idea what the top L&G line is though as I don't think my IBM pension has done anywhere near that well.
What I'm seeing though is Scottish Widows, where the bulk of the money is, is not a great performer.
Does anyone know typically strong performing pension funds I should maybe be moving across to?
I intend to retire in 10 years.

Thanks

What's your attitude to risk?

beeza650

dunstonh said:

Stick it all in Fundsmith SIPP???

Fundsmith doesn't have a SIPP.

What I'm seeing though is Scottish Widows, where the bulk of the money is, is not a great performer.

A number of the funds in the list are not comparable.  That fund is lower risk than a bunch of them.

Does anyone know typically strong performing pension funds I should maybe be moving across to?

As it stands, you are not really in a position to make that decision as you have more learning to do.  You have picked some random funds investing in different areas with different risk levels and are trying to compare on the basic of past performance during a pretty volatile period.  That is not how you pick funds.

I have a Hargreaves Lansdown SIPP and a chunk of that is invested in Fundsmith Equity Class I - Accumulation (GBP). I only picked 3 of those funds and it was a fairly long time although the Fundsmith was a bit more recent as I was enticed by all the (seemingly correct) hype.

The others are all workplace pensions.

beeza650

Marcon said: What's your attitude to risk?

I am aiming to retire before 60 - if my investments don't work out then I can just keep working - so my answer would be 'fairly high'

Prism

So the workplace pension might well not offer Fundsmith so it just comes down to if you think it will be a good investment for your SIPP. Mine is about 50% Fundsmith.

beeza650

Prism said:

So the workplace pension might well not offer Fundsmith so it just comes down to if you think it will be a good investment for your SIPP. Mine is about 50% Fundsmith.

....or I can transfer my (ex) workplace pensions to a SIPP.  
That's the thing though - I'm not good at this stuff - I'd rather entrust it to someone that is (at a fair fee). Maybe Scottish Widows aren't.

Prism

beeza650 said:

Prism said:

So the workplace pension might well not offer Fundsmith so it just comes down to if you think it will be a good investment for your SIPP. Mine is about 50% Fundsmith.

....or I can transfer my (ex) workplace pensions to a SIPP.  
That's the thing though - I'm not good at this stuff - I'd rather entrust it to someone that is (at a fair fee). Maybe Scottish Widows aren't.

Scottish Widows are just a platform, much like HL run your SIPP. They just happen to have a pretty limited set of funds but amongst them you can find some cheap world index funds and a few ok active ones. If it was me, I would probably transfer an old pension into a SIPP too.

NedS

Fundsmith has just 27 holdings according to their latest fact sheet, but I guess you know that. That's a huge concentration risk throwing all your eggs in one relatively small basket. There is no guarantee that the companies (or funds) that have performed well during the last 10 years will perform well during the next 10 years. Being so concentrated allows Fundsmith to outperform when they get things right, but equally they will under perform when they get things wrong.

beeza650

NedS said:

Fundsmith has just 27 holdings according to their latest fact sheet, but I guess you know that. That's a huge concentration risk throwing all your eggs in one relatively small basket. There is no guarantee that the companies (or funds) that have performed well during the last 10 years will perform well during the next 10 years. Being so concentrated allows Fundsmith to outperform when they get things right, but equally they will under perform when they get things wrong.

I guess that's what I'm trying to figure out - how to pick a pension portfolio that's got a mix of "risky" stuff like Fundsmith but also some less risky investments. I contacted a few IFAs and their fees add up to a lot. More than enough for me to want to spend the time to try to sort it out myself - I'm just now trying to work out the best way to go about it.

OldScientist

There may be a number of things for you to think about:

1) Overall stock allocation. You've mentioned you have a good tolerance of risk (or volatility), so you might consider a relatively high allocation to stocks (e.g. 75% or more). While you might retire in 10 years, you (hopefully) will be investing for a total of 40 years or more.
2) The passive approach to investing would then suggest that you should have all (or at least the majority) of your stock allocation in a world index tracker. Over long periods (10 years or more), the evidence (e.g., https://www.spglobal.com/spdji/en/research-insights/spiva/ ) is that these will do better than the vast majority of active funds. On a personal note, I have less than 5% of my overall portfolio in actively managed funds (the one active fund is a hangover from when I was going through a performance chasing phase!) although I do have small tilts to small cap, property, and gold.
3) Non-stock allocation. The simplest approach is to use a global bond (hedged to GBP) fund. Alternatively, the non-stock bit can be held as cash proxies either in the form of a money market fund or short term bonds, or, if HL allow active savings as part of a SIPP, in fixed rate cash accounts.

For asset allocations below 100%, even easier than 2 and 3, is to buy a single fund of funds (e.g., Vanguard Lifestyle, HSBC multi asset, etc.) with an asset allocation that suits you.