My SIPP provider charges quite a lot to deal in shares, but it's free to deal in funds, so I decided to make a somewhat elaborately diversified fund strategy. I wanted to keep costs pretty low, so thought to use mostly passive funds, but if the yield is significantly better on an active one, then I choose that.
- roughly age in bonds (mostly index-linked gilts, also normal gilts, corporate and high-yield bonds)
- roughly 7% property
- roughly 7% gold/other precious commodities
- rest in shares (equity funds) with more in small-caps than large caps, globally diversified (not much in EU, as prefer to invest in America and Asia)
This setup keeps my annual costs below 1% and allows me to invest in a pretty decent selection of funds and the like. There are a million and one other ways I could have done this, and I am sure that you would think of something else too, but this is just what I am happy and comfortable with. It gives me some security from the gilts, and the shares' focus on small-caps allows for growth. I like to have a small amount of gold, but I do buy and sell it when the price goes mad, as that would take it too far above my 7% allocation. I also don't like to have too much in property, as I just don't trust it really. I like businesses and I prefer to invest in those.
Please remember, I am not a financial advisor, you need to make your own decisions and consult a registered professional if needs be.
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