How many funds should I invest in a SIPP?

Tractorboy72

https://forums.moneysavingexpert.com/discussion/comment/81897091#Comment_81897091

Thank you for your excellent reply. The main reason for moving from Nest is because of the poor choices of funds and fees are high. Had used Nest because we had to opt into a pension scheme for employees in my company many years ago. Now in process of closing my limited company.

My wife's is in the standard Nest retirement fund and mine is in a high risk Sharia fund. Mine has done very well (believe it is one of the best perfoming funds over last 5 years) but it does have large gains and drops usually when Trump makes one of his Tariff announcements! My wifes has done ok but feel it could have done better elsewhere.

Would you mind sending me a private message with the funds you currently have? I will understand if you do not wish to do this.

jimjames

I've got 12 funds in mine. As mentioned by dunstonh individual index funds are cheaper so I have US index at 0.06% rather than global ones at over 0.2% for example. I also have a larger UK and Asia/EM percentage than the index, paid off this last year but higher risk. Also have a couple of global investment trusts for some balance too.

dunstonh

Thank you for your excellent reply. The main reason for moving from Nest is because of the poor choices of funds and fees are high. Had used Nest because we had to opt into a pension scheme for employees in my company many years ago. Now in process of closing my limited company.

There has never been a requirement for directors to be considered for auto-enrolment unless they also have a contract of employment.

i.e. shareholding directors (beneficial owners) won't have a contract of employment. whereas an employee given a director's position would.

So, from what you say, it was never a requirement for you to use the auto-enrolment scheme. So, you didn't have to use them.

The majority of shareholding directors use their own individual scheme and make employer contributions to that.

My wife's is in the standard Nest retirement fund and mine is in a high risk Sharia fund. Mine has done very well (believe it is one of the best perfoming funds over last 5 years) but it does have large gains and drops usually when Trump makes one of his Tariff announcements! My wifes has done ok but feel it could have done better elsewhere.

Its an extremely high risk fund. Hence its extreme volatility. It was an undiversified fund with a thematic bet on tech and growth. You got lucky as those two areas boomed in the period you were in it. The recent change has dulled that somewhat. But that is not a bad thing as a repeat of the dot.com crash would have seen the Sharia fund drop 80-90% in value whereas with the sukuk change, it would have dropped around 60% instead. Still far more than a typical UK consumer is willing to accept but that is the choice you make going into niche areas.

Linton

https://forums.moneysavingexpert.com/discussion/comment/81897147#Comment_81897147

Here is my growth portfolio with %s. The aim is to diversify and spread the risk as far as possible by avoiding excessively large allocations to particular countries, sectors, company sizes etc. However as a retiree my needs are probably different to yours so the portfolio would not be directly applicable to your situation.

]

Janus Henderson European Small Companies I Acc 8

T Rowe Price US Smaller Companies C Acc 8

Invesco MSCI China All Shares GBP ETF 8

M&G Japan Sterling I Acc 8

Xtrackers STOXX Europe 600 ETF 1 C 19

M&G Global Emerging Markets I Acc 22

Vanguard USA Eq Idx 27

Nurse2047

ftse all world- invests in large, medium and small companies, diversified so one is all you need don’t make it complicated!

DT2001

I have two, a global ETF and an ultra short term bond ETF. The latter is for near term drawings. My S&S ISAs are geared to income generation and I invest in ITs which are diversified and have some with long term growing dividend records. I have cash ISAs which cover OH’s gap to SPA, funds for potential property move and a rainy day fund for market corrections. Depending on how you intend to use the SIPP, when (your 2 years maybe), your flexibility re drawings and your own personal preferences dictates how many you need/want.

I split from my IFA last year and they were in the midst of moving their clients to a simpler global tracker/bond mix which they said kept costs down whilst over the longer term provided solid returns. I agree with their approach and that of Warren Buffet (for his heirs) and Lars Kroijer. The key is what is your goal. My approach will not be perfect but it should achieve my aims with minimal hands on needed.

Twoetfs website has some interesting articles on what you need.

MarkCarnage

https://forums.moneysavingexpert.com/discussion/comment/81898230#Comment_81898230

Still quite a high concentration risk due to stock weightings, and it's all equity risk. At times of stress correlations tend to 1 and by definition this fund will do what the global equity market does.

MarkCarnage

I hold 11 Investment Trusts (or similar) in my SIPP.

Mix of global equity (4), income (1), UK equity focus (1), absolute return/defensive (2) private equity secondaries (1), a private credit fund and a property related fund.

The last has been an absolute disaster, but was only ever a quarter sized holding and is now inconsequential. Should have sold a year or so ago but if it's worthless it doesn't move the dial now, Private credit fund is down a little in capital terms but has a 9% yield…held for 7 years so on total return has been ok. Again, it was never a full holding size. Most equity ITs have done fine, a couple very well. Defensive have largely done as said on the tin.

My ISA is more pure equity exposure via ITs with some gold exposure which I bought 6 or 7 years ago. 12 holdings there, about to become 11. Again, all have different role.

If you just want plain vanilla passive equity exposure, then no need to have more than 1 or 2 holdings. If you want any tilts or specialist stuff you will need more holdings. However, you can over complicate and over think things if you are not careful.

Tractorboy72

Thank you all very much for all the replies. First time posting and some really useful advice and info.

kempiejon

There's more to markets than equities. Property can be collected via REITs, gold has plenty of ETF or miners though they are a bit of leveraged play on prices rather than holding the metal. Other commodities and debt, commercial and government can be ETFd too. I like a global spread of large/med and although small caps can outperform I don't allocate to them outside the UK. I have precious metals, Oil Cos and other miners, UK gilts held directly and USA government debt via ETF. I've been thinking about how much Mag 7 is in global tracker and have looked to move toward less heavy tech/US allocation in a global tracker by making a choice about cap weighting vrs other indexes.