advice on regular payments into a SIPP please

WindfallWendy

Ah, thanks everyone, for setting me straight on the difference between SIPP investment management and ISA management. 

I wonder if I should look into SIPP, purely because I have an inheritance that I don't want to squander and because I would like to stop 'having' to work by 60 (I'm currently 47). 

But I'd also like to have a holiday caravan by the sea, and a loft conversion, and to be mortgage free by 60 too 😄 I did go to a financial advisor once, who was looking into modelling my future, but they messed up the figures and kept us waiting for 6 months so we pulled out. Plus over the time they'd kept us waiting, I'd learnt a lot about sensible approaches myself, so was loath to pay them £3k / year for their help. 
Starting to wonder if I might need their help after all 🫤

incus432

sadexpunk said:

initially i thought just one fund to keep it simple, but then i read this link sent to me on another thread https://monevator.com/best-global-tracker-funds/ which recommended diversifying larger sums of money, so im currently looking into which funds to invest in. 

My reading of that article is that choosing one World (or Developed World) index fund is fine (I use VHVG), not that you need to hold several of them (not sure if that's what you meant), but diversify with bond/gilts, and you can always add more UK or emerging markets or gold etc if you wish. 

sadexpunk

incus432 said:

sadexpunk said:

initially i thought just one fund to keep it simple, but then i read this link sent to me on another thread https://monevator.com/best-global-tracker-funds/ which recommended diversifying larger sums of money, so im currently looking into which funds to invest in. 

My reading of that article is that choosing one World (or Developed World) index fund is fine (I use VHVG), not that you need to hold several of them (not sure if that's what you meant), but diversify with bond/gilts, and you can always add more UK or emerging markets or gold etc if you wish. 

yes, i also got that from the article, and got the impression that the 'HSBC FTSE all-world index fund C' would be the one to plump for if just going for one.  it was in the posts below the article that i read about diversifying which also seemed to make sense.


so im also considering that option too.  interested in thoughts on this.  are you all mainly diversifying, or KISS with just the one fund? :-) 

i think the 4 funds ive got my eye on at the moment are the 'HCBC FTSE All-World index fund C', 'VG Global All Cap', 'VG Developed World ex-UK Equity,' and 'Fidelity Index World'.

any obvious reasons not to choose those?  such as theyre all too similar to each other?  or the costs are quite high on fund X for instance?

thanks

incus432

They are quite similar I think and my own approach is KISS with just one world index fund, at the cheapest cost possible. Not sure why you would deliberately choose an ex UK fund unless you are particularly pessimisitic about the UK.  I assume you want accumulation rather then distributing income. 

The other factor is whether to choose an open ended fund (like Fidelity or HSBC or some Vanguard funds) or ETF (like Vanguard VHVG or VWRL). Check ongoing costs on them all eg at this page. 

https://www.morningstar.co.uk/uk/compare/investment.aspx#?idType=msid&securityIds=0P0001IHVU

ETFs are often cheaper to hold on some platforms than OEIC funds, as they cap charges.

sadexpunk

incus432 said:

They are quite similar I think and my own approach is KISS with just one world index fund, at the cheapest cost possible. Not sure why you would deliberately choose an ex UK fund unless you are particularly pessimisitic about the UK.  I assume you want accumulation rather then distributing income. 

The other factor is whether to choose an open ended fund (like Fidelity or HSBC or some Vanguard funds) or ETF (like Vanguard VHVG or VWRL). Check ongoing costs on them all eg at this page. 

https://www.morningstar.co.uk/uk/compare/investment.aspx#?idType=msid&securityIds=0P0001IHVU

ETFs are often cheaper to hold on some platforms than OEIC funds, as they cap charges.

ive absolutely no idea at all about open ended funds/ETFs et al, im a total financial doofus.  i read links posted, and recommended funds on here, and think well if theyve been recommended by you experts, then they must be ok

so the ex-uk one was recommended on here earlier i think, thats where ill have got it from.  altho you may be right, i dont have a lot of faith in the uk to be honest, but i guess most countries populations would say the same about theirs too.

i just think that no, i cant get specialist financial advice on here, but reading monevator and asking questions myself will probably be more financially savvy than paying for a financial advisor.

thanks

incus432

To be clear there is nothing wrong with any of those funds.  OEICs (sorry for jargon) and ETFs are just different ways of holding the underlying assets. Depends which platform you are going to use and how much you'll have there if there is any difference.

bjorn_toby_wilde

I use three of those funds (I don’t have the VG Global All Cap). I don’t have a particular reason for holding the three rather than one.  Just thought it would be interesting to see how they compared.

Incus432 is right though. If you look at the holdings in those funds there are big overlaps (Apple, NVIDIA, Microsoft, etc) but their performance isn’t identical.

bjorn_toby_wilde

I forgot the other part of your question was about the fund charges.

Fidelity Index World 0.12
HSBC All World 0.13
Vanguard ex UK 0.14

Not much in it.  You can check this on II before you buy.

sadexpunk

thanks for the info and comments, appreciated.

any of you think theres some importance in the £85,000 cover limit on funds, so that may also be a good reason to diversify?  or is there such a small chance of anything happening that its negligible?

incus432

bjorn_toby_wilde said:

I forgot the other part of your question was about the fund charges.

Fidelity Index World 0.12
HSBC All World 0.13
Vanguard ex UK 0.14

Not much in it.  You can check this on II before you buy.

Just to say, according to Monevator if you include transaction costs the charges are

Fidelity Index World 0.12%. (In fact Developed World only)

HSBC All world 0.15% (Developed World plus Emerging markets)

Vanguard ex UK 0.15% (Developed World ex UK)

These are all OEIC funds

If you did want ETFs those are in the lists too

As to the 85k protection, you still own the holdings even if the platform went bust (extremely unlikely IMO) and it would be a matter of someone else taking over and the inconvenience of that rather than losing money.

https://forums.moneysavingexpert.com/discussion/6175111/protection-for-share-isas-over-85-000