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Fund choice for a new SIPP
J B Ag
Posted: 11 February 2017 10:13:35(UTC)
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I hope to retire in 10 years time and have started to take more interest in how my pension is performing. My first shock was my provider was charging 1% as well as the usual charges for the funds. So first step i have moved my pot of approx 200k to a new provider HL and i know you will all say 0.45% is still expensive, but the choice of funds with them is massive compared to previously. So a two part question.

1. As i am now starting to purchase units of funds in the sipp, my worry is that the FTSE and DOW are riding high at the moment, and we may see some correction. So far i have only used £100k of the money and wonder if i should hold on to the cash to invest if the markets fall. Or should i invest it all now and stop trying to second guess what will happen.

2. My portfolio has taken me weeks of research, looking at funds , sectors, managers performance etc and so far my investments in approx equal weighting are:

Baring Europe select
Evenlode income
Fidel Glob Technology
Fundsmith equity
Lindsell train global equity
old mutual uk mid cap
polar Global insurance
R&M Uk equity smaller companies
Royal London Sterling Extra yield Bond
Stewart Asia Pacific Leaders
MAN GLG Japan core alpha

Constructive comments on this choice greatfully received. Be gentle with me
Many thanks
JB
David Appleby
Posted: 11 February 2017 11:20:01(UTC)
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I suggest you invest in i-Share Core ETFs and ITs otherwise your annual service charge will be very high.HL cap these at £200 per annum.There are several high performing ITs with much lower AMCs than unit trusts and no stamp duty is paid on ETFs.Alternatively, Fidelity charge just £45 AMC and only 0.1% for buys and sells for ITs/ETFs.
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dlp6666 on 13/02/2017(UTC), Law Man on 14/02/2017(UTC)
Joe Soap
Posted: 11 February 2017 11:30:14(UTC)
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Sorry to harp on, I know what you said about HL etc..... You do realise you are going to be paying them getting on for GBP 90 a MONTH just to look after your money?

I had a SIPP and ISA a bit bigger than your pot that I moved from HL to II and I saved over GBP 120 per MONTH.

II will charge you less per YEAR than HL charge you per MONTH.

Regarding the fund holdings, looks OK other than I wouldn't hold both Lindsell Train and Fundsmith at the same time. And if you look at the investments in the (very good) Evenlode fund you may find quite a few overlaps between the funds there too.

But, seriously, you need to think about your choice of HL longer term. When you start drawing down an income from the SIPP, do you really want to be paying HL that much every month? If you draw down 4% per annum income, HL are taking over 11% of your drawn down income as fees.
4 users thanked Joe Soap for this post.
J B Ag on 11/02/2017(UTC), Raj K on 11/02/2017(UTC), dlp6666 on 13/02/2017(UTC), Guest on 27/02/2017(UTC)
J B Ag
Posted: 11 February 2017 11:53:43(UTC)
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Thanks Joe Soap, i absolutely hear what you are saying and agree about charges. However, my first move was from Friends life to HL 2 weeks ago where i was being charged 1% and with a very limited range of funds available to choose from. I am expecting the monthly charge from HL, but this is somewhat tempered by the fact they make no charge for dealing in the funds, unlike a lot of other companies who charge £10 per transaction. As i will still be making monthly and ad hoc payments into the sipp, i guess that could be saving me upwards of £50 per month in dealing fees. I agree when my payments stop and i go into drawdown, then i will need to look even more closely at the fee structure to save the fees eating away at the capital.
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dlp6666 on 13/02/2017(UTC)
kWIKSAVE
Posted: 11 February 2017 11:59:44(UTC)
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Some nice funds but, as already has been said, quite a lot of overlap in the

Fundsmith, Lindsell Train & Evenlode ones

Consider AXA Framlington Health or Worldwide Healthcare Trust

First State Global Listed Infrastructure

Tritax Big Box REIT

for different sectors
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J B Ag on 11/02/2017(UTC), dlp6666 on 13/02/2017(UTC)
Tug Boat
Posted: 11 February 2017 13:00:24(UTC)
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I liked the global income funds: Newton, Artemis, Veritas, Threadneedle etc. I used to get them to pay out the income then use this income to top up one of them each year.

I still hold a few UTs, as the providers' charges have reduced recently and they perform well. The rest are mostly global income ITs and ETFs such as GBDV.

I too moved from Friends Life to HL and a similar sum. During the transfer I negotiated a discount on the charge with them. It's worth the cost of a phone call.

With my mix of ITs, ETFs and UTs the charge is around 0.125%
Ludditeme
Posted: 11 February 2017 13:10:48(UTC)
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I would also reconsider the charges. I was in HL and really liked the platform and information supplied. I then saw an article about the effects of charges, and moved out to III. You still get a really easy trading and monitoring experience which is backed up with research. I accept that I pay £10 to trade, but that is nothing when you look at my annual fee of £196 (from memory).

HL are making a lot of money - which is why it is is held with conviction by Nick Train I suppose. The more your pot grows, the more you pay out. III is fixed.

Have a look at this:
http://www.telegraph.co....eapest-sipp-fund-shops/

Good luck
1 user thanked Ludditeme for this post.
dlp6666 on 13/02/2017(UTC)
Mickey
Posted: 11 February 2017 13:44:12(UTC)
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Hi,
I'd stay with HL but seriously consider switching to Investment Trusts, there is sufficient choice to create a nice diversified portfolio with IT's and in many ways having less choice per sector is a bonus. If staying with funds then with retirement just 10 years away I would look to add less risk through a fund such as Troy Trojan or something similar.

If starting out with IT's then a look at John Barron is worthwhile, his column in Investors Chronicle is interesting, the latest is at http://www.investorschronicle.co.uk/2017/02/09/tips-and-ideas/our-portfolios/investment-trust-portfolio/backing-britain-MdxWlmIeXi0ALqrPjPk7FO/article.html

Another option is to subscribe to his website but at £160 per year it adds to your costs.. http://www.johnbaronportfolios.co.uk/

I would also set out an asset allocation for yourself and then choose your funds to fit into that, otherwise you easily end up with a lot of funds holding the same assets. I keep my AA very simple by holding the same % in cash, UK, Global, Flexible and Themes. Others will mix bonds, equities, cash, property etc.

HTH,
Mickey
5 users thanked Mickey for this post.
Jeff Liddiard on 11/02/2017(UTC), J B Ag on 11/02/2017(UTC), TJL on 11/02/2017(UTC), bill blayney on 11/02/2017(UTC), dlp6666 on 13/02/2017(UTC)
chubby bunny
Posted: 11 February 2017 13:55:39(UTC)
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Some useful links for finding the platform which would best suit you portfolio:

http://www.comparefundplatforms.com/compare.aspx

Snowman's spreadsheet - https://drive.google.com...KI1UzlfTDV3VG1XX1U/view

http://monevator.com/com...cheapest-online-brokers/
4 users thanked chubby bunny for this post.
bill blayney on 11/02/2017(UTC), Mike L on 12/02/2017(UTC), dlp6666 on 13/02/2017(UTC), c brown on 24/02/2017(UTC)
Jeff Liddiard
Posted: 11 February 2017 15:12:25(UTC)
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Mickey;43018 wrote:
Hi,
I'd stay with HL but seriously consider switching to Investment Trusts, there is sufficient choice to create a nice diversified portfolio with IT's and in many ways having less choice per sector is a bonus. If staying with funds then with retirement just 10 years away I would look to add less risk through a fund such as Troy Trojan or something similar.

If starting out with IT's then a look at John Barron is worthwhile, his column in Investors Chronicle is interesting, the latest is at http://www.investorschronicle.co.uk/2017/02/09/tips-and-ideas/our-portfolios/investment-trust-portfolio/backing-britain-MdxWlmIeXi0ALqrPjPk7FO/article.html

Another option is to subscribe to his website but at £160 per year it adds to your costs.. http://www.johnbaronportfolios.co.uk/

I would also set out an asset allocation for yourself and then choose your funds to fit into that, otherwise you easily end up with a lot of funds holding the same assets. I keep my AA very simple by holding the same % in cash, UK, Global, Flexible and Themes. Others will mix bonds, equities, cash, property etc.

HTH,
Mickey


John Baron's portfolios have been mentioned on this forum on numerous occasions over the years and I do like the idea, as a novice, of following what someone else is doing! Does anyone here follow to the letter his growth or income portfolios? If not to the letter, what would you change?
TJL
Posted: 11 February 2017 18:45:26(UTC)
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I started with funds 20 years ago (with HL) but eventually realised how much I was paying in charges (it was eye watering) and am now almost totally invested in a smallish number of investment trusts with some ETFs and individual company shares.
I discovered recently (for Vantage Fund accounts at least) that HL now have a 'charges' tab where you can see how much you are paying per month, which I think is to their credit.
I think that a realisation regarding the charges you are paying is a developmental step in the investment learning process.
Some successful and highly regarded investors on this forum go for individual company shares, but for me top quality investment trusts with low charges do the business.
2 users thanked TJL for this post.
dyfed on 11/02/2017(UTC), dlp6666 on 13/02/2017(UTC)
Joe Soap
Posted: 12 February 2017 02:17:13(UTC)
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Just to point out - The GBP 20 per quarter you pay to II in fees, you get credits for two free trades. So, if you trade 2x per quarter effectively they cost nothing. They do not roll over though, you use them or lose them. I do in fact use them most quarters as I tend to look ahead a bit regarding what I'm going to do next. Hanging on a few weeks for the next free trades gives me time to reflect on that. The last couple of quarters has seen me selling some under performers. So now I will reflect a while what to next until next quarter. HTH.
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dlp6666 on 13/02/2017(UTC)
dyfed
Posted: 12 February 2017 09:32:14(UTC)
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RE charges:
I have my main sipp in Alliance (maybe not a great choice but OK on basic fees) then a smaller amount in HL because I can hold investments in non-sterling currency, which Alliance don't allow. HOWEVER I only hold ITs, shares etc in HL: I don't hold UTs oics or trackers, which keeps the fees down to £17 pm....do II allow foreign trades? must look it up...
DCB
Posted: 12 February 2017 09:56:54(UTC)
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Please be aware fees rack-up to big amounts over the years...........
Having left Hargreaves Lansdown some years ago I would not return even if they were competitive on fees.........which of course they are not.
A J Bell Youinvest charge me 50% of what HL would be. The fees are OK accept for Unit Trusts , I prefer holding ITs and ETF but have done so well with Fundsmith I am loath to leave Terry.
Come Terry lets have a UK IT!
D
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dlp6666 on 13/02/2017(UTC)
Ludditeme
Posted: 12 February 2017 10:12:02(UTC)
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DCB;43046 wrote:

Come Terry lets have a UK IT!
D


I wonder if he would hold HL in that Trust? That would mean he would invest in them, and they wouldn't touch him!

It would probably come with a massive premium anyway, so I would just go for the shares.
J B Ag
Posted: 12 February 2017 10:13:39(UTC)
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I would like to thank all of you for taking the time to reply to the OP, but we seem to be going off at a tangent focused on fees. Anyone got an answer to Qu1??
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Cyrus Zaydan on 15/02/2017(UTC)
TJL
Posted: 12 February 2017 10:54:30(UTC)
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You have a point, but discussions quite often go off on a fee focused tangent, possibly an indication off just how important they can be.
You appear to have a reasonable spread of funds, but I have no knowledge of most of them (and how they might overlap for example) so cannot really assist - sorry.
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J B Ag on 12/02/2017(UTC), Guest on 14/02/2017(UTC)
Tug Boat
Posted: 12 February 2017 11:02:23(UTC)
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No one has addressed q1 because all our crystal balls are being serviced at the mo.

I have bought some stuff recently, but I am very good at buying at the top of the market.

I sold Fundsmith and Lindsel Train and bought AAIF and BUT. Both Smithy and the chop-choo have had a very good run. The two ITs are a tad out of favour at the mo and on a good discount so I went for them.

It doesn't smell like crash time, but it never does.

So, I am looking to buy Far East and Europe and avoid US.

So to answer q1 I think there's some selective upside, but not match in the West.

Let's see how that pans out in a couple of months...
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J B Ag on 12/02/2017(UTC), dlp6666 on 13/02/2017(UTC)
CUEBALL
Posted: 12 February 2017 11:05:41(UTC)
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..But what's all that got to do with how many pastie's gregg's sell's?
Tug Boat
Posted: 12 February 2017 11:06:25(UTC)
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Also avoid North Korea
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Mike L on 12/02/2017(UTC), dlp6666 on 13/02/2017(UTC)
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