Investor Views: “It's Time to be More Risky With My Pension”

SIPP investor Christina Wynn tell Morningstar how she want to take a more hands on approach to her retirement savings

Emma Simon 31 July, 2015 | 10:54AM
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Christina Wynn has recently reviewed her retirement savings and says she feels it is time to take a more risks with her money.

Wynn, who works as a virtual assistant, invests currently splits her savings between a SIPP and an ISA, both of which are earmarked for her retirement.

She says: “I’m in my forties now, so this money will hopefully be invested for almost another 20 years. I’ve been prompted to review these holdings recently, and I think I’ve been too cautious, particular with my SIPP.

“I think I can afford to be a bit more aggressive; to ride out a few market blips and hopefully this will pay off in the long run, in terms of better returns.”

The core holding in her SIPP is Newton Real Return. According to Morningstar fund analysts this is “a strong choice for investors who seek a more cautious element to their portfolio, but still pursue positive long-term absolute returns.”

Like any absolute return fund it targets positive returns in all market conditions. Unlike some of its peers however, the managers have delivered on this stated aim in recent years, delivering positive returns in every calendar year since 2004, with just one exception – 2011.

Over the past three years it has delivered an annualised return of 2.71%, and over 10 years has posted an average annual return of 6.16%.

The fund has an experienced and highly credible lead manager in Iain Stewart. The fund has a Bronze rating from Morningstar analysts, reflecting their confidence that the manager will continue to deliver the fund’s objectives and outperform his peers.

Wynn manages her SIPP through Chelsea Financial Services.

Taking on Emerging Market Risk

Wynn does take on more risk with her ISA, investing in First State Asia Pacific Leaders. Wynn says this fund has delivered impressive returns in recent years – which has earned it a five star Morningstar rating.

The fund is managed by Angus Tulloch, who has more than 30 years’ experience as a manager,  mostly gained running Asia-Pacific ex-Japan equities. This fund has been the victim of its own success; it has been ‘soft-closed’ to new investors for some time.

Tulloch’s strong track record has led to him gaining a Silver rating from Morningstar analysts, who remain confident in his ability to continue to outperform, despite recent changes in the fund’s parent company structure.

On July 1 this year the parent company was split into two separate entities; First State Stewart Asia and Stewart Investors.

Christina Wynn, pictured with her husband, is investing to fund her retirement

Wynn also has more recently used some of her ISA funds to invest in Woodford Equity Income. She feels this less volatile fund compliments the higher-risk Asian holding.

Manager Neil Woodford has as much experience investing in UK equity income as Tulloch does investing in the Pacific region. 

He has a Bronze rating from Morningstar analysts, but as the fund only launched a year ago it does not have the track record to earn a star rating. Year to date it has delivered a 13% return for investors.

Wynn says she did not invest in Woodford’s previous funds: Invesco Perpetual High Income and Income funds. But said: “The launch of this new fund was a good catalyst for me to review my holdings. I decided that I wanted some of my money in this new fund.”

Wynn reinvests the income this fund delivers in a bid to boost future growth. Wynn says her only other investments are cash savings, designed to help her fund higher education costs.

“I’ve got two teenage children and two teenage step-children, so it will be an expensive few years for us,” she said. “At some point I want to get them investing for their futures.”

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BNY Mellon Real Return A GBP Inc120.53 GBP-0.06Rating
Invesco UK Eq High Inc UK Inc331.67 GBP-0.40Rating
Invesco UK Equity Inc UK Inc1,305.76 GBP-0.37Rating
LF Equity Income A Sterling Acc0.97 GBP0.00
Stewart Inv APAC Ldrs Sstby A GBP Acc9.25 GBP-0.56Rating

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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