Tanya Carr started saving into a SIPP after leaving full-time work to pursue a freelance career: “I had worked as an accountant for a number of years, and had a company pension. But I wanted to ensure I continued saving for my retirement.”
She opened this SIPP with Chelsea Financial Services: “I already had an ISA with them, although I wasn’t actively contributing to this at the time. I noticed they also offered a SIPP - in conjunction with Suffolk Life. It made sense to try and keep my various investments on one platform, as it helps me keep track of how much they’re worth, and what they are invested in.”
Although she has worked in finance, she says she is by no means an expert when it comes to investments. “I am used to dealing with VAT returns and tax receipts. However, my accountancy training has made me very aware that it makes sense to ensure investments are tax-efficient. This is another reason why I wanted to make sure I utilised my pension allowance.”
Carr – who is in her mid-40s and lives in Hertfordshire — says that she has tended to invest in funds, rather than direct shareholdings. “I don’t think I have the knowledge, nor the time to keep track of how individual company’s are performing. I prefer to pay a manager to do this for me.”
She has largely stuck to funds on the “recommended list” that companies like Chelsea publish for their investors. “I’ve tried where possible to diversify. To date I’ve been fairly happy with how these funds have performed.
“If anything, my only problem is that I haven’t invested as much as I’d hoped.” Carr says that in recent years, after having children, there often wasn’t the surplus funds to make a decent payment into her pension each year.
“Even though I wasn’t working I was hoping I could invest £2,880 into my SIPP, and gain the tax relief on top. But I haven’t been able to invest this each year. However, they girls are a bit older now and at school, so I have been able to do a bit more work and will hopefully make more substantial payments into this SIPP over the next few years.
“This may give me the opportunity to invest in a few more funds.”
Highly Rated Funds
Carr says her holdings initially were aimed at getting some geographical diversity. She has invested in Gold-rated Fundsmith Equity as well as Stewart Investors Asia Pacific Leaders and Liontrust Special Situations, which focuses on UK stocks.
She has more recently also invested in Artemis Global Income to try to diversify into some income-generating funds.
She says: “I think these are all slightly more adventurous funds, but the SIPP is a longer-term investment so I am happy with that degree of risk.”
Stewart Investors Asia Pacific Leaders has a Silver Rating from Morningstar, whose analysts says the fund “remains a solid offering given its talented management team, best-in-class investment approach and competitive fees”.
The fund is now run by David Gait, who took over lead manager duties from long-term manager Angus Tulloch when he retired in September 2017. Morningstar says that the investment strategy, focusing on higher quality holdings, should ensure it is one of the least volatile options in the Asia Pacific (ex Japan) sector. It has the ability to protect assets in a market downturn too, which was demonstrated in the “challenging environment in 2018” where it outperformed the typical category peer by 14 percentage points.
Liontrust Special Situations has a Bronze Rating from Morningstar, which describes the fund as “an attractive option for investors seeking an unconstrained UK equity fund”. It is managed by Anthony Cross with support from Julian Fosh, who have 20 years’ experience in the industry.
The fund doesn’t just focus on large FTSE 100 companies but also has a considerable exposure to smaller and mid-cap stocks. Morningstar points out that the performance has been strong with the fund comfortably outperforming both the index and the category average, to the end of October 2018. The fund has tended to protect investors in weaker market conditions, according to Morningstar.
Artemis Global Income is another Bronze-rated fund. Morningstar analyst Jeffry Schumacher says: “The distinctive character of Artemis Global Income and the successful execution by portfolio manager Jacob de Tusch-Lec make this an appealing offering. De Tusch-Lec has given this fund its own signature, which makes it stand out from the crowd.”
Schumacher says that while most equity income funds rely heavily on bottom-up stockpicking, macro analysis also plays an important role at this fund.
He adds: “The fund further differentiates itself by looking outside of the traditional universe of dividend stocks commonly found in the portfolios of peers, which leads to a stronger tilt toward mid- and small caps. Its contrarian style gives it a value tilt, but the prevailing economic background can steer the fund to other segments of the market as well. The fund also invests more opportunistically in special situations, thematic-driven ideas and turnaround stories.”
Morningstar data shows that the fund has performed strongly since inception, comfortably beating its average peer, although the fund's risk has been above average as well.
Carr is happy with the performance of her SIPP to date. “It certainly seems to be delivering better returns than my old company pension.”
She may also look to restart her ISA investments, with a view to building a saving pot for when her children go to university. “That’s still some way off, but it is good to have a goal. And if they decide that is not the route for them, then there will be a bit to hopefully help them on the housing ladder.”
She adds: “We bought around 20 years ago and that has definitely been one of our best investments. But I do worry how the next generation will be able afford to own their own homes.”
