Quint's SIPP

[Quint]

Hi,

As Promised in the previous thread, here is my initial SIPP portfolio. The capital was transferred in from an old Barclays pension i started about 26 years ago that i continued to subscribe to but never raised my contributions. A few years ago it was sold to Reassure who dumped it in one of their mediocre default funds.Every year i got a statement saying at 55 i was going to get a pathetic annuity which would have been of little use in the grand scheme of things. Then George Osborne changed the rules of the game and i suddenly thought, hang on a moment i am missing a trick here, this has now become a useful amount of capital.

Having spent the previous few years building our investment ISA's i felt i had accumulated enough experience to be confident enough to transfer this in to a SIPP and self manage it.

The lump sum landed in my SIPP mid november 2016 and was initially invested over the following two months with each holding being purchased with a single lump sum.

I based the initial investments on what had been working ing my ISA. My wifes SIPP has since been built since using IT's but at the time i did not have sufficient knowledge of IT's so i decided to stick with what had been working for the time being.

The two biggest holdings by far was Lindsell Train and Fundsmith (nearly 50% betwen the two) as they had been the two top performers in my ISA along with a much smaller holding in Baring Europe Select (European smaller Companies) which again had been a strong performer in my ISA.

The Legal and General US index was purchased to use as a benchmark, maybe a better one would have been the International Index, but this is the one i chose.

Today the total value of the SIPP has gone up 23.28% after charges which i am happy with.

A couple of notes.

A holding of CF Woodford Equity income was sold after 6 months at a small profit.
Artemis Global Income was also sold after 6 months at a small profit.
My holding in Baring Europe Select was doubled at this time - the intial purchase is up some 30%
The remainder was used to purchase the two investment trusts in August and 3 small cap individual shares which will be held long term.


Stock Gain/loss (%) Capital %

Funds
Baring Europe Select Class I - Income (GBP) 17.2 8.44
Fundsmith Equity Class I - Accumulation (GBP) 29.67 28.01
iShares Pacific ex Japan Equity Index Class H - Accumulation (GBP) 20.19 4.31
Jupiter India Class X - Accumulation (GBP) 17.62 4.22
Legal & General US Index Class C - Accumulation (GBP) 15.3 8.28
Lindsell Train Global Equity Class D - Income (GBP) 26.17 26.17

Shares
Boohoo.com Ordinary 1p -21.3 0.57
Fevertree Drinks plc Ordinary 0.25p 8.16 0.79
PurpleBricks Group plc Ordinary Shares 1p -1.92 0.72

Investment trust
Henderson Smaller Cos Investment Trust plc Ordinary 25p Shares 11.18 8.05
Scottish Mortgage Investment Trust Ordinary Shares 5p 15.7 8.39

When i leave my current employer at the end of the month i will be transferring my dc pension in which is about 1.5x the current value of the SIPP today. This will be invested in a spread of IT's i do not intend to buy any more OEIC's or Unit Trusts due to HL platform charges. In fact it is my intention to liquidate all holdings apart from Fundsmith and Lindsell Train and move that capital to IT's also.

Longer term the goal of the SIPP is to give me the income i need from natural yield (based on 3.5% after charges have been deducted) once the 25% tax free has been taken. This will be until i hit state pension age. At the moment based on a capital value of the SIPP and my dc pot i am well on track.

Having just turned 50 i have 5 years minimum until i can access this pension, the worse case scenario, if it is not where i want it i can continue with some contract work, i am happy to take this risk and persue a slightly higher growth strategy. Once in drawdown i also have 5 years income in cash and bonds as my safety net. I can also supplement my income with contract work if i choose which increases flexibility even more.

I will update when the new capital has been transferred in and new investments made.

[ADrunkenMarcus]

I'm a fan of having a punchy, focused portfolio. If something doubles in value, it's little use if the holding is 0.5% of your capital. The high allocation to Fundsmith and Lindsell Train has been very positive for you so far. Good luck.

Best wishes

Mark.

[Quint]

I'm a fan of having a punchy, focused portfolio. If something doubles in value, it's little use if the holding is 0.5% of your capital. The high allocation to Fundsmith and Lindsell Train has been very positive for you so far. Good luck.

Best wishes

Mark.

Cheers, there will be updates as time goes on.

Regards
mark

[Steveam]

While I understand Mark’s comment it really does depend on the overall context. Once you feel you’ve “won the game” then there are arguments for minimising risk by sensible diversification. This might also be true if you have little opportunity to recover from a specific risk.

I used to run a quite concentrated portfolio and also trade equity options but I’ve reached a stage where I’m happier to be well diversified across both markets and sectors and can happily live on the likely index returns so I’ve gradually moved about 50% of the portfolio to tracker ETFs and ITs. Excluding these no specific share now accounts for more than 5% of the portfolio. (I know funds are not specific shares but funds do have their days in the sun and the opposite).

Thanks for your update and thanks to Mark for his comment as I’m always delighted to hear people describe their thinking (or internal debates) as this helps and encourages my own thinking. (The posts I find rather tedious are the ... look how clever I am, I avoided Carillion without the thinking behind the avoidance).

Best wishes,

Steve

[ADrunkenMarcus]

Totally agree, Steve. Context is clearly important.

In my case, I have a very long term horizon. I think we also need to look at it from the perspective of a collective (such as an investment trust or unit trust) as well as an individual company shareholding. For collectives, I'd be much more comfortable having one of them as a large proportion of the portfolio (25%+) compared to a single company.

Best wishes

Mark.

[Quint]

Thanks for the words of support.

Wifes SIPP is de-risked mostly for income already because she is 5 and a bit years older than me so no major changes should be required in the near term. While not pushing for overly high yield (3-3.5%) should give the opportunity for some decent growth over the longer term.

Mine will be slowly geared towards income over the next few years.

My belief is that while Lindsell Train Global Equity and Fundsmith have shown good year on year growth of late they seem to me to have good defensive qualities which puts them as a good long term hold.

Also i believe that collectives that are generalist in nature tend to underperform and wither rather than drop through the floor like for example Capta, Provident etc this does give some opportunity to make adjustments before too much damage is done. Hopefully

When the next lump sum hits my SIPP it will be invested in IT's so the weightings will drop back natuarlly, this will be over the next few months.