single fund

martin7575

Ive read several comments on threads recommending against single funds for investments recently.
I have a HSBC global tracker in a SIPP with 20k ish in it- I have set up a regular investment to come from my limited company should I be looking to diversify or keep adding to the same fund? am probably 17 years form retirement

thanks for any advice

Alistair31

How do you diversify a global tracker? 

martin7575

@Alistair31 by investing in a different fund I suppose?

Hoenir

A diversified portfolio reduces risk at the expense of a potential minimal reduction in return. High risk strategies over extended periods don't produce far better returns. A byproduct of market efficiency. 

martin7575

so keep paying into the existing fund would you say?

EthicsGradient

Some think that everyone some have some money invested in bonds as well as stocks; personally, I reckon that with regular investment and another 17 years to go, most likely, then a global tracker will be within reasonable volatility bounds, and likely to get you more than a mixture of stocks and bonds.

Another consideration could be exposure to sterling changes against world currencies - a global tracker goes up more in value if the pound falls, but goes down when the pound rises. Since some of your expenditure in retirement will likely be in line with the pound rather than any other currency (paying for salaries of people in the UK providing services), I think there is a case for a bias towards UK investment above the global tracker level. How much, I can't say; I'm personally aiming for about 13% UK, rather than the 3.5% or so in a global tracker.

Hoenir

martin7575 said:

so keep paying into the existing fund would you say?

Is this your only form of pension saving? 

Londonlisa12

My question was if  the Pound DOES fall and all other things being equal.
This was in response to EGs comment” a global tracker goes up more if the pound falls” which in my humble opinion is a certainty if this far left Labour rabble gets in.

ColdIron

OP doesn't have a global tracker, he has a multi-asset fund

martin7575 said:

After lots of research here I finally managed to get 15k into a SIPP with ii.- hsbc global strategy balanced.
im considering either another lump sum in the new tax year or investing a regular amount. Question is should i keep adding to the same fund or look at other investments. I did think about investing into the hsbc dynamic fund to hedge my bets with a more equity skewed fund

InvesterJones

martin7575 said:

Ive read several comments on threads recommending against single funds for investments recently.
I have a HSBC global tracker in a SIPP with 20k ish in it- I have set up a regular investment to come from my limited company should I be looking to diversify or keep adding to the same fund? am probably 17 years form retirement

thanks for any advice

If as suggested this is a global, multi-asset, fund, then it's already extremely well diversified (it's not a single asset, it's a fund of funds). At this point any additional funds will either be adding more risk (e.g. gold, small cap), or decreasing diversification if they duplicate existing assets. Sticking with the same fund is a perfectly valid option - if it was right for you before then it's probably still right for you.

Getting into the finer details about which multi-asset fund is best is pretty much splitting hairs - there are pros and cons (inc. costs) of a home bias or currency hedged portions should the pound return to historic values from it's current weakness, but they're probably not significant enough to make a difference to worry about.

EthicsGradient

Londonlisa12 said:

EthicsGradient, So if someone expects the pound to fall, buying something like ishsres MSCI India UCITS ETF acc GBP would be beneficial opposed to something containing UK equities?

As a short term punt, yes. Anything that is basically tied to foreign economies. For instance, from Jan 2022 to Jan 2023, the S&P 500 lost about 19% of its value: S&P 500 - Latest Index Price & News - BBC News
But over the same period, the pound lost about 11% against the dollar: Pound Sterling (GBP) Latest Exchange Rate & News - BBC News
so an ETF denominated in pounds only lost about 10%: VANGUARD VUSA Stock | London Stock Exchange
(figures are rough, since each graph gives a weekly value, not necessarily the same day)

For long term investing (ie the subject of this thread), you may decide that there won't be any long term trend in the pound against other currencies, in which case it's not a concern. But if there's the possibility that there is (which could be a strengthening of the pound instead - in which case your overseas assets lose value), you might want to mitigate against that by having more of your investments oriented towards the pounds which you use for a lot of your spending.