Ben Seager-Scott takes a twin track approach when it comes to investing his own money. In his SIPP he “plays around” with investment ideas and takes more risk, whereas he tends to “play it safe” when it comes to his ISA.
He explains: “I am only 34 so I’m looking at a 30 or even 40 year timeframe for my pension. This is certainly a more punchy portfolio than my ISA, or general investment account.
“It may be going a bit far to say that this is where I get to have fun with my money, but I enjoy taking a bit more risk and looking for opportunities with good long-term growth prospects.”
Seager-Scott says the key to his SIPP investment strategy is to concentrate on total return. “I’m looking for good long-term capital appreciation where I will really see the benefit of compound returns.”
As the director of investment strategy at online stockbroker Bestinvest, where he has worked for the past five years, Seager-Scott has a better understanding of markets than most.
He says around 50% of his SIPP is in the company’s multi-asset portfolios. “I am looking at the aggressive growth mandate as I am comfortable taking a risk, at least with my pension money.”
He also says he thinks it’s important that he invests in the company’s own portfolios, which he has helped to construct. “It would be a bit weird if I didn’t and I think it’s good practice to have my own interests aligned with that of our investors.”
This multi-asset portfolio invests in a range of actively managed funds, as well as a portfolio of lower cost “advanced passive funds”.
Investment Trust Picks for the Long Term
Seager-Scott also invests in a number of investment trusts alongside his core portfolio. He is a fan of Asian Total Return Investment Company (ATR), and likes its focus on total returns, making it a good fit with his personal aims.
Morningstar fund analysts also like this trust; it has a four-star rating and the management team now have a Bronze Rating. This has been upgraded in recent years following the appointment of Schroders to run the trust. Previously it had been managed by Henderson and suffered a few years of lacklustre returns.
Morningstar closed-end fund analysts say: “We hold the management team in high regard. Robin Parbrook and King Fuei Lee are experienced fund managers. Parbrook is responsible for stock selection in the strategy and brings over two decades of investment experience.”
They points out that risk management plays an important role in the process, continuing: “Although it's not an absolute return fund, [this trust] aims to protect capital somewhat on the downside; this is evidenced in the track record of the trust’s open-end equivalent, which has achieved this without compromising in rising markets too heavily.”
Seager-Scott also has a holding on BlackRock Frontiers Investment Trust (BRFI). This has suffered in the short term he says, but he says he is confident these frontier economies have good long term growth prospects.
Morningstar analysts give the manager also has a Bronze Rating, and it earns a five star performance rating. Analyst Lena Tsymbaluk says: “We have a high opinion of manager Sam Vecht’s knowledge of frontier markets and his ability to consistently apply his process to this offering.”
Given the nature of this investment Seager-Scott says he feels more comfortable investing in this through his SIPP rather than his ISA portfolio.
Playing it Safe with ISA Investments?
When it comes to his ISA Seager-Scott says he takes a similar approach, splitting his money between a fund of funds portfolio while making smaller investments in funds and trusts of his own choosing. However, the risk profile is very different.
“I’m taking more of a cautious or balanced approach” he says. Many people his age may be prepared to take more of a risk with their ISA funds, but he says he has to be cautious on equities.
“I need to look at my future earning potential. If there was a serious downturn in the stock market then my job could, in the worst circumstances be at risk, as I work in the financial industry. This is when I might need to fall back on my ISA, so I don’t want this suffering at the same time.”
That said, he’s also dabbled in a few alternative investments, investing in start-up businesses directly through crowd-funding, although as yet these can’t be held in either an ISA or SIPP.
“At the moment I’ve invested in a company growing herbs and micro-vegetables in underground tunnels in Clapham. It’s obviously a risk, but I find it quite exciting investing in such ventures.”
Seager-Scott says he has been saving seriously for about six or seven years and has learned some important lessons along the way.
“In theory you should invest more into falling markets and be cautious when prices have risen strongly. But this is often harder to do in practice with your own money. There have been a couple of times when I’ve hesitated to invest after share price falls. Doubts start to creep in and it’s easy to imagine markets falling further. Investing my own money has certainly made me more interested in the behavioural economics and the psychology behind investing.”
He adds: “Investing shouldn’t always be comfortable. If it is the chances are you are simply what everyone else is doing and then it will be that much harder to make money.”
What funds are in your ISA or SIPP? What have been your most successful investments to date? If you'd like to feature in Investment Views and tell us about your investment strategy please contact the Editorial team on UKEditorial@morningstar.com
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