hiriskpaul wrote:Looks all good to me Tim. I hold far less equities than you, but don't have a DB pension. My global equity split is similar to yours, but a bit less in the UK and 3% in Canada. I target US 40%, Europe 20%, UK 10%, EM 10%, Japan 10%, Asia/Pacific 7%, Canada 3%.
If you want to replace your US small cap fund, you could do that in your SIPP and hold a US listed ETF instead. That would boost your dividend as there would be no withholding tax to pay (assuming your SIPP provider supports this) and you would pay lower admin fees. For example, Vanguard S&P Small-Cap 600 ETF VIOO has an expense ratio of only 0.15% compared with 0.4% for the LSE listed iShares ETF you hold. I hold the Vanguard Small-Cap Value ETF VBR, with an expense ratio of just 0.07%, but this is not so concentrated in small caps as the S&P fund. It does pay more income though if you would prefer that, with an historical yield of 1.92% compared with 1.26% for VIOO.
Instead of VUSA, I would suggest either the US listed VOO or the whole of market VTI in your SIPP, again assuming your SIPP provider can receive US dividends without the 15% withholding tax.
As you are underweighting USA, you are sort of overweighting smaller caps anyway, so could probably do without DFE, which is expensive (0.58% TER + rebalancing costs as this is not cap weighted). In my SIPP, to complement VBR, I hold Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). Expense ratio is only 0.13%, which is very low for a small cap fund. Historic dividend yield is 2.31%, helped by the low running costs. DFE is very expensive and 25% is in UK stocks as well, probably overlapping VMID. Personally I would get rid of it.
Sorry to come back to this after a year but I have been quite busy. I have made small changes to the portfolio and spend some of the cash on new cars for me and the wife and as well as holidays, etc. The cash has been reduced to about £90K but the equity side grown to about £750 K with growth and new investment bringing my equity/fixed income ratio to about 83%
The 83 % equity allocation on my SIPP + ISA platform is now:-
USA ------- 39 % ----- VUSA -- + ---(about 1/10 of it is in ISP6)
UK -------- 13% ----- VUK ---+ ---- (about 1/5 of it is in VMID)
Euro ------ 20% --- -VERX
Japan ----- 10% --- - VJPN
Asia Pac --- 7% --- - VAPX
EM ------- --11% --- -VFEM
Note: The above allocations include about 10% of the portfolio in VVAL to give a Value bias.
My main question is about using US listed ETFs to avoid withholding tax. I have struggled to find a platform which holds VOO, VTI, VBR and VSS. (HL appears to have US listed company shares but not these ETFs ?). I am still using Vanguard VUSA and iShares ISP6 for my US allocation. Can you point me in the right direction ?