Risky to invest heavily in 1 fund?
Discussion
I've recently consolidated some old pensions, and added a large cash sum to create a single SIPP. This is where all my future pension savings will go.
I initially chose a couple of funds to spread the risk, but one has a good track record for growth and since I've invested in has risen a further 8% in about 3 months. The other has done very little. I wish I'd put the whole lot in the main fund I liked.
Is it too risky to put my whole SIPP into a single fund? Obviously by nature the fund is a spread of shares, but managed by a single entity.
The SIPP only accounts for half my pension. The other is an ex company pension that's fully managed, and I also own some investment property.
Edited to add...it's Lindsell Train Global Equity if it's of any significance.
I initially chose a couple of funds to spread the risk, but one has a good track record for growth and since I've invested in has risen a further 8% in about 3 months. The other has done very little. I wish I'd put the whole lot in the main fund I liked.
Is it too risky to put my whole SIPP into a single fund? Obviously by nature the fund is a spread of shares, but managed by a single entity.
The SIPP only accounts for half my pension. The other is an ex company pension that's fully managed, and I also own some investment property.
Edited to add...it's Lindsell Train Global Equity if it's of any significance.
Edited by 98elise on Monday 15th May 19:33
Thanks for the advice.
I've been investing in shares for years so a fund seemed like a big enough diversification, however it was still niggling me that I would be with one fund manager hence the initial split between two.
I'll look around for a couple of other global funds with good performance.
I've been investing in shares for years so a fund seemed like a big enough diversification, however it was still niggling me that I would be with one fund manager hence the initial split between two.
I'll look around for a couple of other global funds with good performance.
GT03ROB said:
98elise said:
Thanks for the advice.
I've been investing in shares for years so a fund seemed like a big enough diversification, however it was still niggling me that I would be with one fund manager hence the initial split between two.
I'll look around for a couple of other global funds with good performance.
Get yourself on a site like Morningstar. They can show you the analysis of things such as stock overlap. You will find that certain stocks are common to many funds & while trying to diversify it is easy to actually increase your exposure to certain companies.I've been investing in shares for years so a fund seemed like a big enough diversification, however it was still niggling me that I would be with one fund manager hence the initial split between two.
I'll look around for a couple of other global funds with good performance.
CaptainSensib1e said:
98elise said:
I initially chose a couple of funds to spread the risk, but one has a good track record for growth and since I've invested in has risen a further 8% in about 3 months. The other has done very little. I wish I'd put the whole lot in the main fund I liked.
Three months isn't anywhere near long enough to judge the performnace of a fund. Different funds will perform well at different times, depending on what and where they invest, and their management style.Depending on the amount in your pension you could consider diversifying. For £5k, I wouldn't worry about it, £500K I certainly would.
In truth you're not going to get any decent advice on an internet fourm, especially when posting such limited information. You either need to go away and do some more research, or speak to a financial adviser.
Whatever you decide, your pension is likely to be one of your biggest assets, so it's worth taking your time to manage it properly.
I think I need to look at moving the other half of my SIPP to something that stands up to the same scrutiny.
FredClogs said:
My SIPP is in 18 funds, it's not a massive amount of money either.
I have Lindsell Train in there, it's a good fund and it performs well, only 27 holdings but they're all decent blue chips, not dissimilar from Fundsmith or Woodfords approach, the Warren Buffet way, that's about 1/3 of it, about 1/3 is in trackers and the remaining 1/3 is split between emerging market stuff and some dynamic equity on the UK markets. The plan being that each year an amount of profit is taken and put into bond funds.
You most likely won't go far wrong with Lindsell Train though. Does sort of negate the point of having a sipp though, you're paying a platform fee for a product you're not using and you'll always be exposed just picking one fund.
The idea was to have 2 initial funds, and punt new contributions into a 3rd. If that worked well I was going to transfer my other pension in and split that over 3 additional funds.I have Lindsell Train in there, it's a good fund and it performs well, only 27 holdings but they're all decent blue chips, not dissimilar from Fundsmith or Woodfords approach, the Warren Buffet way, that's about 1/3 of it, about 1/3 is in trackers and the remaining 1/3 is split between emerging market stuff and some dynamic equity on the UK markets. The plan being that each year an amount of profit is taken and put into bond funds.
You most likely won't go far wrong with Lindsell Train though. Does sort of negate the point of having a sipp though, you're paying a platform fee for a product you're not using and you'll always be exposed just picking one fund.
At the moment my SIPP accounts for about 25% of my retirement planning, which reduces my exposure a bit.
I've also been limiting myself to the HL Wealth 150 funds, which I think is a bit short sighted.
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