SIPP Portfolio Advice needed please

DottedEight

OK, thanks, I was finding on Google that a 61% us bias was reported

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/82084092#Comment_82084092

Must be true then :D

As far as I can tell, because globally 61% of the available equity by value is based in the US, a neutral index will also contain 61% US based equities. If you go less than 61% US then you would be introducing a bias that says the equity outside the US is worth more (risk adjusted) than the equity in the US. Absolutely fine to take that view, but usually even the pros can't beat the market, so what chance do we have? It depends on your reason of course - you might have an ethical view guiding your investments which means you don't mind paying more if it means you sleep better.

DottedEight

Hi Thanks. Hope I didnt imply google was right and you were wrong :-) certainly not the intention

I fully understand your really good explanation which makes perfect sense.

My reasons for wanting to minimise us weighting was purely from reading many reports that the us is about to make a huge correction and having my final 10 years of spending cash in vwrp got me a little concerned

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/82084112#Comment_82084112

Right, on the surface a logical decision. But do you think you're the first person to see said report? If not, markets have already had time to adjust to the view and have already priced in what they think is the likelihood that the US (as a whole….) is about to make a correction. If you think you know better, or have some secret information that's not available elsewhere (but isn't insider :p) then perhaps you would back yourself to beat the market, but see above comments - it's pretty hard to do over the long run even for pros.

EDIT: however if you are concerned, and/or have a short enough time frame that you can't wait for market recovers, absolutely dial down the volatility. Your sleep is important. Placing a bet on another region outperforming the US isn't much of a risk-reduction strategy, but decreasing the proportion of equities and increasing less volatile assets is.

MK62

There are some "passive" multi-asset funds with less US exposure (if high US exposure is your main concern)…..take a look at L&G Multi-index or Abrdn MyFolio Index, (there are various versions of each with different asset weightings etc)……and there are no doubt other firms offering similar……

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82084092#Comment_82084092

It would only be a bias if it was higher than that, as 61% reflects the actual global % as the previous poster has explained.

DottedEight

Thanks @MK62 for those suggestions I will take a look

Thanks to the others for the explanation

bucklb

One quick thought - the money in your SIPP will be subject to higher rate tax if you take too much out at once. You might want to consider "draining" it, with a yearly withdrawal, in to an ISA so that at some point all your money will be available w/o excessive tax overheads.

In my case I'm draining my SIPP on the basis that we might want to help the kids out with house deposits and I don't want to be constrained by tax considerations. The change to SIPPs falling within the estate for IHT purposes is also a consideration

DottedEight

Yes thats a very good point thankyou, I had already considered that, especially with all of the SIPP crystallised already.