Single fund or spread over multiple?

El_Torro

My pension is currently a lot smaller than £800k and I currently have:

4 multi asset funds
1 global smaller companies fund
The above is split across 3 platforms

While I'll be the first to admit that I could simplify I'm happy with what I've got. I would have at least 2 platforms and at least 2 multi asset funds. While the risk of multi asset funds / platforms going bust is low I like having some contingency.  

Even though the investments are protected an IT glitch or financial problems at the platform provider could mean that you can't access your money for a prolonged period of time.

Bostonerimus1

I use Vanguard extensively because of how it is structured in the US. Vanguard is owned by its funds and they are owned by the individual investors and I feel happy to have the vast majority of my money with them in 3 funds. I stick with large well known platforms and large well known funds, no crypto or things like emerging market funds. A guiding principle I follow is to avoid "hype". So I was dubious about the Woodford fund when it came out and would never have invested in it. The same goes for any fund where the manager is famous, so no Fundsmith for me, and no Bitcoin. I'll own crypto when a crypto company enters one of the large equity indexes.

There have been some good suggestions about how to use £800k for retirement going through the yield vs growth and "bucket" structures, but I also think the if the OP wants income they should look at using some of the money to buy an annuity.

Bostonerimus1

g002ahe said:

Depending on your age (are you over 55?), I would also consider taking a portion of the fund and creating diversity by converting to a fixed income, perhaps indexed to RPI, in the form of an annuity. I see this as a kind of diversification.

Excellent point. I think diversifying retirement income streams beyond the usual DC drawdown assets is important, and looks more attractive today with the higher annuity rates.

Bostonerimus1

Albermarle said:

As an absolute minimum I would split the £800K over two platforms and in each hold a different multi asset fund.
For example one with a UK bias and one without. Or one with a fixed equity % and one with a floating/risk based one.
This is to avoid 'all eggs in one basket' as explained in a previous post.
In reality I would also allocate some to investments that are not large cap equity or bonds . Something to tinker with !

If you own a single multi-asset fund you could well have 10 or 20 individual funds inside that wrapper so for investment diversity I think you are ok, although the utility of some of the smaller holdings is debatable. The drawback for drawdown is that with a single fund you can't pick a choose what to sell when you want income. There is the risk of the fund being mis-managed like Woodford or of the platform collapsing. You can mitigate the first risk by using index funds and the second by using large reputable platforms and I would have no worries with using just one platform like H&L, Vanguard etc.