New SIPP - are my fund choices sensible

DeadlyD

Hello dear Forumites,
Having been educated by you guys, in particular @xylophone @dunstonh @Albermarle @JohnWinder, I have transferred my workplace pension - £200k into a SIPP with H&L on the basis that the cashback was £1.5k (0.45% charge but can transfer out in 12mths & I have the remainder of £150k with SJP which I will deal with in Sept.

Now for the fun part choosing the funds, as a newbie to this I have read the Monevator articles and being cautious I thought its best to stick with well known funds such as follows:-

Fund			Passive / Active		return 23/24
Vanguard Lifestrategy 60% Acc			Passive		5.12%
HSBC Global Strategy Balanced Portfolio C Acc			Active		6.63%
HSBC Global Strategy Adventurous Portfolio C Acc			Active		9%
Fidelity Multi Asset Allocator Growth W acc			Passive		5.98%

My questions are:- 
1. Should I split the £200k into 2 /3 /4 funds? or go with 1 or 2 ? to start with?
2. Should they be Passive?? or a mix? 
3. Vanguard has a  UK bias  - is that wise? It seems every man & his dog recommends Vanguard (?)
4. And I took from this site that HSBC Global was worth investment, as a risk 6 / 7 profile should I consider the Balanced or Adventurous? 
5. Any other thoughts on funds would be very much appreciated  

Last thread..
https://forums.moneysavingexpert.com/discussion/6489305/ifa-and-pension-fund-management-charges-transferring-a-dc-workplace-private-pension#latest

Thanks! 
Deadly 

Scrounger

If you were to invest in ETF's rather than funds you would reduce the HL platform charges from £900pa to £200pa. 

ETF's: VWRP or VHVG may be worth considering.


Scrounger

leosayer

What's you time horizon? ie. when will you start drawing from the SIPP.

dunstonh

Now for the fun part choosing the funds, as a newbie to this I have read the Monevator articles and being cautious I thought its best to stick with well known funds such as follows:-

Fund			Passive / Active		return 23/24
Vanguard Lifestrategy 60% Acc			Passive		5.12%
HSBC Global Strategy Balanced Portfolio C Acc			Active		6.63%
HSBC Global Strategy Adventurous Portfolio C Acc			Active		9%
Fidelity Multi Asset Allocator Growth W acc			Passive		5.98%

a) that is not cautious
b) it has massive overlap.
c) all four of them are active but use underlying passives.

My questions are:- 
1. Should I split the £200k into 2 /3 /4 funds? or go with 1 or 2 ? to start with?
2. Should they be Passive?? or a mix? 
3. Vanguard has a  UK bias  - is that wise? It seems every man & his dog recommends Vanguard (?)
4. And I took from this site that HSBC Global was worth investment, as a risk 6 / 7 profile should I consider the Balanced or Adventurous? 
5. Any other thoughts on funds would be very much appreciated   

1  -one would be fine
2 - they all use underlying passives.  All of them are active.  Ignore monevator in this respect as they have a brain block there.  i.e. they think Vanguards management decisions (e.g. UK home bias) means it isn't managed.  But they think that HSBCs similar weighting decisions are managed.
3 - Only Vanguard fanboys recommend VLS nowadays.   Its not bad, certainly not but home bias and higher charges are negatives.
4 - You said you were cautious.  All the funds are medium risk or medium/high to high.

Why HL for holding OEICs?

DeadlyD

leosayer said:

What's you time horizon? ie. when will you start drawing from the SIPP.

I'm taking UFPLS this yr - just tax free amount allowance  = £12,570 +£4,190 (75% taxable + 25% tax free) 

Fermion

Hi DeadlyD

I've been with HL for quite a while. A few observations:-

I would recommend investing in income funds rather than accumulation but use the HL facility that allows you to reinvest income back into fund. I find this helps you to keep a track on growth and income/yield. Also when you do go into drawdown when you retire it avoids you having to sell funds to provide income.

You seem to have specifically selected funds with low costs (circa 0.2%) but in doing so I think you will probably sacrifice yield/income performance and growth. I think it's worthwhile looking at the HL Wealth 50 list and specifically Global and UK equity income funds which offer a HL discount.

I personally would avoid lifestyle funds - I just don't think it's worth it in periods of high inflation. 

The core of my portfolio (which has been in drawdown for a number of years) is as follows:-

Artemis Income Class I - Income (net charge 0.59%)
Artemis Global Income Class I - Income (0.6%)
Jupiter Asian Income Class I - Income (0.72%)
EdenTree Res & Sus Man Inc Class B - Income - (0.48%)*
BNY Mellon Global Income - Class U Income (0.55%)*
Troy Trojan Income Class X - Income (0.62%)
(* note these funds used to be in the Wealth 50 list but are no longer in them. However they still offer discounted charges and I like them!)

Over the last 6 years that I have been in drawdown, I have only taken the natural yield.
Over this period my portfolio has grown by 16.6% and I have averaged a yield of about 3.9%

I know HL charges can be a bit higher than other platforms but I like the functionality and ease of dealing/withdrawals. They have also have allowed me to hold VCTs etc in my fund and share account portfolio. I also like the Active Savings option for transient spare cash.

DeadlyD

@dunstonh
My questions are:- 
1. Should I split the £200k into 2 /3 /4 funds? or go with 1 or 2 ? to start with?
2. Should they be Passive?? or a mix? 
3. Vanguard has a  UK bias  - is that wise? It seems every man & his dog recommends Vanguard (?)
4. And I took from this site that HSBC Global was worth investment, as a risk 6 / 7 profile should I consider the Balanced or Adventurous? 
5. Any other thoughts on funds would be very much appreciated   

1  -one would be fine
2 - they all use underlying passives.  All of them are active.  Ignore monevator in this respect as they have a brain block there.  i.e. they think Vanguards management decisions (e.g. UK home bias) means it isn't managed.  But they think that HSBCs similar weighting decisions are managed.
3 - Only Vanguard fanboys recommend VLS nowadays.   Its not bad, certainly not but home bias and higher charges are negatives.
4 - You said you were cautious.  All the funds are medium risk or medium/high to high.

Why HL for holding OEICs?


Deadly -
1. why just 1 - whats the benefit?
2. Annoying I thought the recommendation for a novice was always Passive funds ?? what is then? and should I be worried going active?
3. Yup 
4. Turn of phrase - cautious as I'm new to Financial jargon and making the right choices...

H&L for OEIC's - oh god dare I ask what OEIC is.. but basically cash back @ £1.5k for transfer and can get out after 12 mths 

DeadlyD

Fermion said:

Hi DeadlyD

I've been with HL for quite a while. A few observations:-

I would recommend investing in income funds rather than accumulation but use the HL facility that allows you to reinvest income back into fund. I find this helps you to keep a track on growth and income/yield. Also when you do go into drawdown when you retire it avoids you having to sell funds to provide income.

Thanks  - Am I right in thinking accumulation amounts would be the same as income, but the latter is the better procedural operation?

The core of my portfolio (which has been in drawdown for a number of years) is as follows:-

Artemis Income Class I - Income (net charge 0.59%)
Artemis Global Income Class I - Income (0.6%)
Jupiter Asian Income Class I - Income (0.72%)
EdenTree Res & Sus Man Inc Class B - Income - (0.48%)*
BNY Mellon Global Income - Class U Income (0.55%)*
Troy Trojan Income Class X - Income (0.62%)
(* note these funds used to be in the Wealth 50 list but are no longer in them. However they still offer discounted charges and I like them!)

I notice that the Artemis and Troy Trojan are in H&L 2024 5 top funds to watch! how would you split £200k? Sounds like you are good at trading but I'm a fist timer at this!

Over the last 6 years that I have been in drawdown, I have only taken the natural yield.
Over this period my portfolio has grown by 16.6% and I have averaged a yield of about 3.9%
Wow

Fermion

Thanks  - Am I right in thinking accumulation amounts would be the same as income, but the latter is the better procedural operation?

Correct - same stocks by the fund manager, just that accumulation is a consolidation of income and fund growth. I just find Income funds easier to manage. You can track growth and yield separately. Particularly good for me as I adjust my drawdown income to track yield performance.

I notice that the Artemis and Troy Trojan are in H&L 2024 5 top funds to watch! how would you split £200k? Sounds like you are good at trading but I'm a fist timer at this!

Artemis Income has been a solid performer for me - consistently solid growth and income. Troy Trojan is a slightly different equity income fund as they invest in a higher proportion of defensive stocks. The theory of investing in that particular fund is that if the stock market did suffer a significant fall then Troy Trojan wouldn't fall as much - I'm not totally convinced! That being said Troy Trojan hasn't performed as well as some of the other funds over the last few years.

With £200K I would probably split this 50-50 across global equity income and UK  equity income funds. Probably 50% Artemis Income, 25% Jupiter Asian Income & 25% BNY Mellon Global Income - but of course it's my personal choice

DeadlyD

@Fermion I was recommended the BNY Mellon by an IFA. 

I’m assuming these are all active managed yet I led to believe through various sources that passive is best. Does it mean I need to keep a careful eye on performance regularly ref active? 

Thanks for the suggestions, very much appreciated and to know you like the H&L platform 😀

artyboy

All in HMWO, £200 capped platform fee per year and £1500 cashback (and in my case, another £1500 to come from my next xfr). You just need to remember to reinvest the ~1.5% in dividends it pays out.

K.I.S.S.