Investment advice - 10 year horizon

cmonwigan

I sold my over actively managed SIPP investments in Dec 23.

The plan was to invest in a simple two/three fund portfolio on Vanguard - FTSE Global All Cap (70%), Global Bond Fund (15%), Sterling Money Mark (15%).  

The money arrived into the Vanguard SIPP in Feb, but being a prat I decided to time the market, and now I am in limbo as I am unable to pull the trigger on the above allocation, due to a fear of a market crash.

Currently I have 70% in the MMF and the other 30% I have drip fed into the FTSE Global All Cap. The total value is currently £230k. I am also currently funding the SIPP with £300 a month. 

Should I continue to drip feed over the next 12 months, or go all in as per the original plan?

My second dilemma...I now have a DC pension via my job, which receives £1700 via salary sacrifice.  This is invested 100% into a Blackrock global equity fund. I have only had this job for a year and its value is £25k.   Should I be looking to invest as per the SIPP i.e. make use of bond and MM fund?

I am 10 years from retirement.  

Marcon

cmonwigan said:

I sold my over actively managed SIPP investments in Dec 23.

The plan was to invest in a simple two/three fund portfolio on Vanguard - FTSE Global All Cap (70%), Global Bond Fund (15%), Sterling Money Mark (15%).  

The money arrived into the Vanguard SIPP in Feb, but being a prat I decided to time the market, and now I am in limbo as I am unable to pull the trigger on the above allocation, due to a fear of a market crash.

Currently I have 70% in the MMF and the other 30% I have drip fed into the FTSE Global All Cap. The total value is currently £230k. I am also currently funding the SIPP with £300 a month. 

Should I continue to drip feed over the next 12 months, or go all in as per the original plan?

My second dilemma...I now have a DC pension via my job, which receives £1700 via salary sacrifice.  This is invested 100% into a Blackrock global equity fund. I have only had this job for a year and its value is £25k.   Should I be looking to invest as per the SIPP i.e. make use of bond and MM fund?

I am 10 years from retirement.  

Depends on your attitude to risk. What is your attitude...?

cmonwigan

I think my advisor had me classed as a cautious investor, but in reality I think I am moderately adventurous. The original portfolio was complicated and overweight in UK equities and bonds.  I lost a lot in 2022 and it never recovered in 2023 and hence the decision to simplify.  Having accessed the Vanguard risk questionnaire I came up with a 70/30 split. I am also tempted by the LS60 - but worried about the UK bias.  

dunstonh

I think my advisor had me classed as a cautious investor, but in reality I think I am moderately adventurous. The original portfolio was complicated and overweight in UK equities and bonds.  I lost a lot in 2022 and it never recovered in 2023 and hence the decision to simplify.

UK equity was the best performing market and only main one that was positive in 2022.  Its been one of the better ones in 2024 as well (beating US in the last 3 months).

Bonds and gilts are where most people have suffered.    That will be the 40% of VLS60.

You could ask your IFA to invest in the IFA version of Vanguard Lifestrategy.   Vanguard have the home bias version and a global version without home bias available to IFAs.    Or you can go with one of the similar alternatives without home bias.

Its also worth noting that VLS60 is made up of around 17 funds.  So, probably a similar or greater number of funds than you previously held.

cmonwigan

Thank you for the pointer toward the IFA version.  So I understand, is the IFA version is only available via an advisor?

dunstonh

Thank you for the pointer toward the IFA version.  So I understand, is the IFA version is only available via an advisor?

Correct.

IFAs can use either the retail version or the professional version.  Consumers can only use the retail version.


chart shows the version you are looking at in blue, the professional version without home bias in yellow and HSBC GS Balanced OEIC in purple (doesn't have home bias - this is the OEIC version you would use. HSBC also do a professional version as well which has done better than retail version but the above is the retail version).   

cmonwigan

Thank you again. Would it be a one off cost to an advisor to purchase the Vanguard fund, or would it be an annual percentage?

dunstonh

cmonwigan said:

Thank you again. Would it be a one off cost to an advisor to purchase the Vanguard fund, or would it be an annual percentage?

Because the portfolio is a discretionary MPS, the adviser takes responsibility on an ongoing basis.  So, would only be available to ongoing clients.  I only mentioned it as you said you had an adviser.  

cmonwigan

Sorry l have misinformed you. We parted ways in December of last year. 

Bostonerimus1

So you regret trying to time the market, but persist in doing it. Your SIPP asset allocation looks ok to me, start today!

With your DC pension being invested all in equities as well as the 70% equities in your SIPP some people would find that very adventurous. However, the wisdom of that allocation depends on your attitude to risk, a future we cannot know, and also things that we can know ie how much debt you have, any other pensions you have, SP and other income sources etc. I'm retired and nudging up to 90% equities, but I have a DB pension so if my investments go down I doesn't change my income. If you are ok with seeing your investments go down for some time then a high equity allocation will probably see you better off in the long term, but losing money just as you begin retirement and need to make withdrawals can devastate a drawdown plan.

cmonwigan

Thanks you Boston. I do have a small DB pension which may provide me @£5k,  and a rental property which if I manage to pay the mortgage off will provide £10k. Unfortunately I still owe £100k..