Where to put SIPP funds... nothing but bad options around?

[DibblyDobbler]

Hi All.

Minor progress update - HL have confirmed they do not have the capability to cater for NS&I investment in a SIPP. Bit disappointing but there it is. Probably can't be bothered with the faff of switching providers just for this so continuing to look at other options...

Read an interesting article on 'seeking alpha' website - very sanguine about corporate bonds. End not nigh, modest returns expected, keep calm and carry on etc. Only reason for substantial downturn would be an equity 'correction'. Seemed well researched and authoritive so I am at least partially convinced.

Current thinking in the light of the above is:

- put a small amount (maybe 20%) in equity tracker - probably Vanguard Lifestrategy 100
- put maybe 60% in a few choice corporate bond funds. Why active not passive on bonds? Two reasons - 1 active charges seem relatively low on bond funds (still more than a tracker but below equity funds), 2 - I read that bond trackers do not have the same record of outperformance as equity trackers
- maybe have 20% cash (not sure about this bit - might just invest the whole lot)

I need to accept there is no perfect answer (until I get my crystal ball working) but the above I hope is sensible for my circumstances.

Any thoughts/words of wisdom welcome

[sidicks]

DibblyDobbler said:

Hi All.

Minor progress update - HL have confirmed they do not have the capability to cater for NS&I investment in a SIPP. Bit disappointing but there it is. Probably can't be bothered with the faff of switching providers just for this so continuing to look at other options...

Read an interesting article on 'seeking alpha' website - very sanguine about corporate bonds. End not nigh, modest returns expected, keep calm and carry on etc. Only reason for substantial downturn would be an equity 'correction'. Seemed well researched and authoritive so I am at least partially convinced.

Current thinking in the light of the above is:

- put a small amount (maybe 20%) in equity tracker - probably Vanguard Lifestrategy 100
- put maybe 60% in a few choice corporate bond funds. Why active not passive on bonds? Two reasons - 1 active charges seem relatively low on bond funds (still more than a tracker but below equity funds), 2 - I read that bond trackers do not have the same record of outperformance as equity trackers
- maybe have 20% cash (not sure about this bit - might just invest the whole lot)

I need to accept there is no perfect answer (until I get my crystal ball working) but the above I hope is sensible for my circumstances.

Any thoughts/words of wisdom welcome

Initial thoughts:
1. That’s a fairly low risk, low return portfolio. Fine if that is what you are looking for!
2. Equity tracker makes sense
3. Definitely active management for bonds if you believe we are moving into an environment where defaults are much more likely
4. The cash allocation will be a drag on performance

[DibblyDobbler]

sidicks said:

Initial thoughts:
1. That’s a fairly low risk, low return portfolio. Fine if that is what you are looking for!
2. Equity tracker makes sense
3. Definitely active management for bonds if you believe we are moving into an environment where defaults are much more likely
4. The cash allocation will be a drag on performance

Thanks for the reply

Ref your comment on low risk - I will be needing the money in about 5 years time and drawing most of it down over the following 5 years (until main DB pension kicks in), also I have also realised that I have very little tolerance for volatility... eg if the market goes down 30% then recovers a year later it won't matter to me as I will have had a breakdown after the initial fall! So needing something boring/safe(ish) which I can forget about and hopefully just get a modest return without too many wild fluctuations...