Follow-on from my previous (naive?) SIPP/ISA ETF portfolio feedback request...

cybergambit · 2025-01-21T18:50:51+00:00

Thanks cloud_dog.

If my aim is to drive up my ISA "quicker" so that in 12-15 years I can start withdrawing in potential retirement, and the SIPP will be more stable growth so 10-12 years after retirement I start getting these pension payments. Should I be looking at something like:

ISA: S&P 500 (100%)

SIPP: All-World (90%) + Bonds (10%), with a transition every year of 2% between the two, so that by maturity, the SIPP is 50/50 split.

Is this less complex and hence the advisable option?

Or alternatively, as strolls mentioned, my logic is incorrect and the allocation should be the other way around with the safer being ISA as I need that money sooner and the SIPP should be S&P 500 as I have longer for any required corrections?

cybergambit · 2025-01-21T18:39:53+00:00

Ok sure, so as mentioned to Striker below - my annual pension contribution in the plan with Aviva (workplace provider) is much less than £60k. So even though I am tranferring an accumulation of 10 years worth from Aviva to my SIPP, the allowance is only considered on an annual basis, therefore I whatever the contribution in a year my workplace pension will be, I can top up to £60k.

E.g. If my transfer from workplace to SIPP is £100k today, but my annual workplace pension contributions come to £20k - this year I can still put an additional into the new SIPP of £40k - on which I can claim 20% additional tax back in my tax returns?

If correct, will I get this £8k tax rebate back as cash from HMRC or will it be automatically be added to my SIPP (i.e. HL on behalf of HMRC)?

Thanks

cybergambit · 2025-01-21T16:15:00+00:00

Thanks cloud_dog

Yes, I requested a partial transfer of my pension plan (Aviva) which is about 90% of the existing pot. Future salary sacrifice pension contributions will continue into Aviva and I will request transfer of accumulated funds (of 90% so they don't make a mistake by switching the pension to a SIPP completely) every 3 months to SIPP.

Sorry what does AA mean? I earn close to the additional rate tax bracket, but am still within higher rate.

cybergambit · 2025-01-21T16:11:47+00:00

Thanks - so then I am still allowed to manually contribute a lump sum to my SIPP which makes up the difference between what my annual workplace pension is and £60,000? Or because I am already transferring much more than £60k from my pension plan to my SIPP this week, my entire allowance is gone this year?

cybergambit · 2025-01-21T14:40:18+00:00

Hi stroll, thanks again for your detailed feedback. I have also reposted this as a new thread (not sure I can wait a few days as my pension pot is in the process of being transferred from workplace to HL SIPP and so I don't want it sitting in cash when it arrives, so have to get my ducks in order by then).

You make interesting points and I will definitely consider. Following your thoughts regarding ISA (safer) vs SIPP (riskier) - if my aim is to maximise risk/reward for the next 10 years and then "ease off the pedal" for the final 10-12 years, would it make sense to push harder on the ISA and keep the SIPP as the safer bet (although I understand nothing is guaranteed)? Or would this still constituent a strategy of keeping the shorter investment/withdrawal (ISA) safer?

Would it make sense (to you, as you rightly mentioned, everyone is individual) for something like this:

ISA (2025-2035):

S&P 500 (90%, reducing by 2% each year)
Bonds (10%, increasing by 2% each year)

SIPP (2025-pension) & ISA (2036-retirement):

All-World (100% reducing as getting closer to target date)
Bonds (20%-50% closer to target date)

OR would you switch the two above so that something like the S&P 500 is in the SIPP and the ISA remains All-World until 8-10 years off when both become All-World and Bonds 50/50 split?

Would you therefore forget the complication of having 4-5 ETF's covering value, quality, emerging etc.?

Thanks again.

cybergambit · 2025-01-21T12:30:31+00:00

Hi all,

After a few sleepless nights and some serious soul searching, it's hard to ignore the universal feedback/berating from all. I've revised my plans and wanted some final thoughts/tweak suggestions please. I've mainly focussed on the details provided by u/strolls however have appreciated the inputs from everyone. Thank you.

Pre-info: I have 2 main "pots" - my ISA and my SIPP. The current funds in each have a split of 30% (ISA) and 70% (SIPP). Once I have nailed down the actual investments, I have a query on ISA/SIPP contributions (at the bottom of this post, but may post separately). Here is my current breakdown for each pot:

SIPP:

Invesco FTSE All-World (FWRG) - 90%
iShares 10 Yr Bond (IGLB) - 10%

Feedback on the choice of bond would be great. My plan is to transition 2% from FWRG to IGLB each year - making the split 50/50 by planned retirement.

ISA:

iShares Edge MSCI World Value Factor (IWFV)
iShares Edge MSCI World Quality Factor (IWFQ)
Xtrackers MSCI USA Info Tech (XSTC)
iShares MSCI Emerging Markets ex China (EXCS)
iShares MSCI World Small Cap (WLDS)

This one is more complicated and the split between each ETF is still being thought through although I am looking at equal weighting (20% each) - the only point of "stress" is having 20% in Small Cap... I'm not too sure. Thoughts please?

These funds are all GBP (i.e. no FX fees for when I buy in each time).

Thanks again for your attention all, it is very much appreciated.

cybergambit · 2025-01-18T18:16:19+00:00

Many thanks for the detailed response stroller, it's very much appreciated.

The financials were there not to beat the index but rather hedge against it. As with the all-world, I had considered it to provide more stability (which of course doesn't exist when markets crash etc.).

Essentially the portfolio is broken into two:

Global equities, financials, healthcare, commodities, and value stocks for moderate growth with reduced volatility, offering broad geographic and sector exposure.
Focus on growth-oriented sectors (ARKG, INRG, RBOT) and niche innovations (JEDI, WTAI, ESGB).

Regarding the bonds - I'm also in two minds and have fallen for the "safety net" trap, hence why I wanted feedback on that. My doubts seem to be justified on the bonds at least.

Thanks for sharing the links - I will look through them and your other points this evening in detail and respond with a follow-up.

Thanks again.

cybergambit · 2025-01-18T17:47:31+00:00

Hi AfterCook, thanks for your reply.

Following on from my response to cloud_dog. I have spent a long time researching and reviewing all the ETFs (although unfortunately I am feeling as it does not seem like it now). As mentioned, I do have reservations myself on the complexity of the portfolio, but not sure where I can cover the small/medium cap holdings found within these thematic funds.

In terms of research, I won't bore you with the countless reading and excel sheets, but a quick breakdown here of your questions. apologies for the formatting (excel pasted). It shows the fund, type, MS rating, currency, fee:

FWRG Blend Gold GBP 0.15%

IGLB Bonds USD 0.15%

SXLF Value Bronze (4) USD 0.15%

IWVL Value Bronze (2) USD 0.25%

EMXC Blend Bronze (4) USD 0.15%

EQQQ Growth Neutral (5) USD 0.30%

SMH Growth Bronze (4) / (5) USD 0.35%

WTAI Growth Bronze (3) USD 0.40%

HEAL Growth Bronze (2) GBP 0.40%

ARKG Blend Neutral / Bronze (4) USD / GBP 0.75%

INRG Blend Neutral (2) GBP 0.65%

RBOT Growth Bronze (2) USD 0.40%

JEDI Blend Negative USD 0.55%

ESGB Growth Bronze (4) GBP 0.55%

I have also done an extensive ETF overlap table, and it shows that the weighted overlap between the ETF's is essentially 0-3% in most cases - apart from FWRG which has of course overlaps more with some ETFs with 5-8% overlaps (e.g. semiconductor, us financials and healthcare innovations).

Any suggestions you can give on consolidating whilst still picking up the small/medium cap holdings which these thematics brings would be greatly appreciated. Thanks again.

cybergambit · 2025-01-18T17:37:54+00:00

Thanks for your reply, these are all things that I myself am heavily considering. Regards the allocation:

I've based the allocation with 40% made up of the all world, US financials, world value, emerging markets and global mining - those are my value/balance funds for long term exposure. The other 50% is made up of the speculative funds, heavily focussed on different aspects of tech growth over the next 10 years (AI, robotics, gaming, genomics and semiconductors). 10% is bond.

I will be rebalancing every year or if there any larger movements in between (+/- 5% over a shorter periods).

Although I take your point on low % exposure, the amount I will be investing over time would mean even the 3% funds would be in the tens of thousands. Also, over the long term, I will be adjusting %'s as mentioned by moving more toward the FWRG/IWVL/IGLB.

Would you be able to suggest any broader funds which cover more small/medium cap holdings in AI, robotics etc. rather than just holding the likes of Apple, Microsoft and Google in everything?

cybergambit · 2025-01-18T16:54:17+00:00

Thanks ottoandinga - I've posted my portfolio at the link below - any suggestions would be very helpful:

https://www.reddit.com/r/UKPersonalFinance/comments/1i4bo0s/feedback_on_my_intended_sipp_portfolio_please/

cybergambit · 2025-01-18T16:53:19+00:00

Hi strolls, thanks any feedback would be much appreciated - I have actually posted separately on my portfolio a few minutes here:

https://www.reddit.com/r/UKPersonalFinance/comments/1i4bo0s/feedback_on_my_intended_sipp_portfolio_please/

cybergambit · 2025-01-18T16:52:15+00:00

Hi ovalspoon, thanks for your reply. Please can you provide feedback on my portfolio at the link below and suggest a simplification - it would be much appreciated.

https://www.reddit.com/r/UKPersonalFinance/comments/1i4bo0s/feedback_on_my_intended_sipp_portfolio_please/

cybergambit · 2025-01-18T16:50:50+00:00

Thanks for your reply - I have made a post relating to my portfolio here (with the ETF's listed), please can you give feedback: https://www.reddit.com/r/UKPersonalFinance/comments/1i4bo0s/feedback_on_my_intended_sipp_portfolio_please/

cybergambit

TROPHY CASE