Investment adjustment - increasing global equity exposure

Sunnylifeover50plan

Morning

I am reviewing how my SIPP is invested and have decided to put more into equities. Currently I am 100% in cash (almost entirely in Vanguard SS £ money market fund).

With the recent drop in equity markets I do perhaps have an opportunity to re-focus up-to 50% of my SIPP value into an off the shelf quality, global equity rich passive, low cost, £ denominated fund.

I usually opt for Vanguard products - LS80/ LS100. I will for the moment retain 50% of my SIPP in their short term £ money market account. The desired outcome is that the new equity rich placement will go untouched and do the longer term, next 30 years, heavy lifting, with UFPLS being taken from cash and the reduced monthly dividend from the MM fund. I accept that =or>50% of my fund will be higher risk and that =or<50% will, for the foreseeable, be lower.

I want to spend some time comparing similar alternatives to the Vanguard products hence a request for a list of suggested alternatives which I can review list using the normal reference; Morningstar etc.

I may of course decide to do nothing but at least I will have periodically reviewed how I invest for the long term.

Thanks

MetaPhysical

Your plan is sound IMO, not that I am an expert in these things.

You could also look at the Fidelity World Index P fund and also the Vanguard FTSE All-World tracker, both low cost and denominated in GBP. 

Hoenir

Sunnylifeover50plan said:

With the recent drop in equity markets I do perhaps have an opportunity to re-focus up-to 50% of my SIPP value into an off the shelf quality, global equity rich passive, low cost, £ denominated fund.

That's a brave call given there's no one who has the faintest idea what the long term impact will be on the global economy. The only certainty is that the rule book has been ripped up with relationships built up over many decades fractured beyond repair. Only in time will the extent of the financial damage filter through and be reflected in the value of individual companies. 

Cobbler_tone

I'm doing the opposite and backing UK equities (on a modest future level, so not backing them much but for a bit of fun), I can see us taking some advantage from our 'friendlier' tariffs, in relative terms.

It'll all be OK in the end...definitely maybe.

MetaPhysical

When I can sort my finances out I am definitely buying more global equities but I have a house sale going through and have enough on my plate at the moment.  This is an opportunity.  I think there'll be another blip downwards when the Trump extra 50% tariff deadline passes tomorrow but then markets will move up.

Bostonerimus1

MetaPhysical said:

Your plan is sound IMO, not that I am an expert in these things.

You could also look at the Fidelity World Index P fund and also the Vanguard FTSE All-World tracker, both low cost and denominated in GBP. 

What's your time scale? I'd be very dubious about making changes right now given all the uncertainty.

Mr_Benn

Hope you dont mind me asking, but I keep seeing people mention having money in a 'Short Term Money Market' , as a safe haven so to speak. . From a quick google, these only seem to pay 4 to 5% pa, which isnt much different to a a Building Society right now.

Do people do it, becuase they have such big sums that even .5% means a lot of money ?

Or are they guessing that interest rates may drop?

Just trying to understand - thank you.

kempiejon

I don't use them but think, if your investements inluding cash are in trading account with tax shelter benefits and you don't want to take that cash out to stick int he building society it's a way of accessing the sort of rates they offer. 

Albermarle

Mr_Benn said:

Hope you dont mind me asking, but I keep seeing people mention having money in a 'Short Term Money Market' , as a safe haven so to speak. . From a quick google, these only seem to pay 4 to 5% pa, which isnt much different to a a Building Society right now.

Do people do it, becuase they have such big sums that even .5% means a lot of money ?

Or are they guessing that interest rates may drop?

Just trying to understand - thank you.

If you have money in a pension pot or a S&S ISA, and you feel you want to hold some/all of that money in cash, then a MMF will give you the same sort of interest you could get in a savings account .
Normally you can not have a bank or building society savings account as such inside a pension or S&S ISA .

Caveat to that is there a few specialist SIPPs were you can do that but not with the mainstream pension providers.

MeteredOut

kempiejon said:

I don't use them but think, if your investements inluding cash are in trading account with tax shelter benefits and you don't want to take that cash out to stick int he building society it's a way of accessing the sort of rates they offer. 

Exactly this. For example I put some funds into my S&S ISA to use up the last of my 24/25 £20K allowance, but didn't want to invest whilst the orange man works out what he's doing. So it'd either sit there earning 0% or low returns, or in a MMF that should roughly increase at the equivalent of 4% for the time I hold it.

It's not risk free though, especially for short periods of time, as MMFs can and do fluctuate daily, and you also may need to consider whether there is buy/sell spread if you plan to hold for a short period of time.

I believe some trading accounts do pay interest in S&S ISAs/SIPPs closer to what you can get in a cash ISA or traditional savings account.

SVaz

My sipp platform only pays 2% on cash,  that’s why I use STMMF.