Rate my SIPP - ITV high conviction

barnstar2077

Juno_Moneta said:

Back to my point about diversification though…

VWRL is a pretty solid and common choice as a passive ‘whole world tracker’ (I bet many MSEers hold it) but I wonder how many investors actually look under the hood?
https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-all-world-ucits-etf-usd-dist

Firstly, most starkly, it has to have a 62%weighting to US stocks - that’s just the reality of global tracking.
The next down doesn’t even come close, Japan at 5%.

Then looking at how it actually tracks the US, as I mentioned above it’s forced to hold mainly tech, Apple, NVIDIA, Microsoft etc etc. 

And I would guess that this isn’t isolated to VWRL and infact many ‘global trackers’ have become proxy tech investments - which is why recent events have hit so hard for so many. 

What I think I’m trying to say is that - yes whilst my concentrated portfolio is very risky right now - the answer isn’t simply buying global trackers instead as their diversity is questionable. Building a TRULY diversified portfolio is actually not that easy and inevitably we will skew towards eg large cap or small cap or a particular sector or region - and further it then needs regular attention to maintain the diversification we all ultimately think ‘is the right thing to do’. 

Maybe recent events are a good opportunity for everyone to review how diversified their own portfolios really are…

Most of the popular global funds are meant to be more reflective of the stock market as a whole, with the ratio for each country deciding it's weighting, and individual company stocks based on how much of that country's market consists of that holding.

Yes, they are heavily into the US and tech and finance at the moment, because they have been very profitable sectors.  Don't forget that these funds are self balancing, as one company slips down the ladder another will rise up to take it's place.  As an investor in that fund you will lose money on the company and sector going down, but will be rubbing your hands together at the company you have been buying cheaply on it's way up!

What would be the alternative look like?

A quick google tells me there are 17 common sectors. 

Agriculture, Forestry, Fishing, Mining, Manufacturing, Construction, Finance, Retail, Healthcare, Education, Hospitality, Transportation, Media & Entertainment, Technology & Information, and Research & Development.

If you tried to make a fund based equally among countries and sectors it wouldn't make a lot of money.

Edit:  I guess I have made a good argument for why these globally diverse 100% equity funds are great for accumulation, but why diversification into bonds and MMF etc maybe a good idea once you stop adding to the pot.

FIREDreamer

Juno_Moneta said:

FIREDreamer said:

It’s held up better than my globally diversified sipp though it hasn’t been fully dementia don proof!

Hi FIRED, yeah everything’s taken a hit hasn’t it, though I’ve benefited very slightly with my approach of occasionally selling a few and buying back, but overall down like everyone else of course. 

And we can all take our own view on whether his tariff plan will have to be rowed back a little, anything could happen…

Your comment about your globally diversified SIPP got me thinking though - how has my portfolio as posted 10th Feb on page 1 done since then compared to a global tracker? There is a common comfort taken from ‘feeling diversified’ but does this actually hold up when such trackers have a huge US focus (typically 60%+?) which inevitably also puts them into things like big tech. 

So whilst it’s too short a period to form any meaningful conclusions I decided to compare to a common tracker I’ve owned in the past - VWRL (Vanguard FTSE All-World UCITS ETF).

10th Feb 2025, ITV 77.45
10th Feb 2025, VWRL 115.17

4th April 2025, ITV 70.90
4th April 2025, VWRL 97.36

ITV loses 8.46%
VWRL loses 15.46%

Interesting. Perhaps that’s why there are no new comments laughing at me - because people have checked their own portfolios first!

Who knows where this will all go next. Fun times. 

(Edited to add I think VWRL had a small 46cent dividend in March, so 36p?)

(And ITV goes ex-div very soon on 10th April which will take a whopping 3.3p out - I say whopping as this is paying 4.6% vs 70.9p, so will have to include this in any future comparisons)

I don’t think anyone was laughing at you, more concerned about the risk of the pension fund collapsing if anything bad happened. Remember Marconi and a few other companies which lost over 99% of their value.

Anyway here’s a bit of schadenfreude …