"I'm Retired But Not Risk-Averse"

Investor Views: Retired investor David Needham has used the proceeds from a property sale to build an adventurous portfolio of shares and funds

Emma Simon 14 April, 2021 | 11:23AM
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David Needham and his wife are both retired and have been investors for around 30 years. David's investment habit began when he became a member of share club and also decided to set up  a self-invested personal pension (SIPP) to help him save for retirement.

David retired in 2016 with no mortgage or debts, and sufficient income to cover costs associated with the couple's current lifestyle. He says: “Early in 2020, we sold a property we had owned in Greece for 14 years. I invested the majority of the proceeds in a with-profits bond with the Healthy Investment Friendly Society."

The bond is expected to generate a return of about 4% in a low risk environment, and as it's classed as a life insurance product, the investment is protected. Alongside this cautious option, however, David has invested some of the money from the sale using an Isa and a new Sipp with AJ Bell where he planned to take a greater level of risk. 

Where I Invested my Isa

David, who lives in the Brecon Beacons, says that despite being retired he is not overly risk-averse. Among his holdings are smaller companies funds and bio-science and technology funds, as well a range of direct shareholdings including some punts on higher-risk "penny-shares".

David says: “I invested much of this money just before the Covid shutdown, so I took a big hit in last year's sell-off. Most of the holdings have now recovered, although I’m down a bit on some of my penny share punts."

David has ditched most of the "safe" options he held, including corporate bond funds, and now tries to spot opportunities where he thinks stocks have been oversold by other investors. When it comes to selecting such funds or shares, David says he uses a "combination of research and hunches".

Some of these have certainly paid off. He says: “One of my Covid picks was Premier Foods (PFD). The share prices was depressed and they were producing everything I thought would become popular with people eating at home.” This stock has delivered impressive returns. According to Morningstar data, investors have seen whopping total returns of 281.89% over the past 12 months.

As well as using such reasoning, David looks at directors' dealing information to help him make decisions. 

A "Semi-Ethical" Approach

David had a varied career, working in HR and later running a manufacturing business, before working in financial services. He describes himself as having a “semi-ethical” approach to investing and tries to identify future trends; currently this means he's looking at companies that are developing new technology or applications to tackle climate change.

One of the biggest holdings in his Sipp  one of his biggest fund holdings is L&G Future World Climate Index, and he also holds the L&G Hydrogen Economy ETF and VT AJ Bell Responsible Growth fund through his Isa.

The L&G Future World Climate Index has a Gold-medal rating from Morningstar, and has delivered total annualised returns of 12.09% over the past three years. As the name suggests this is a passive fund, which largely replicates the benchmark index, but also tilts to companies with higher ESG (environmental, social and governance) scores. It may also exclude shares fo companies that do not meet the manager’s climate pledge.

David is hopeful these funds will deliver long-term capital growth: “I’d say my most of my Sipp is meant to be a longer-term investment and the intention is that my granddaughter will inherit it when I pop my clogs." David has also opened a Junior Sipp for his granddaughter, which currently only invests in the AJ Bell Responsible Growth fund as she is very keen on green issues. 

Away from ESG investments, David has recently added some smaller companies funds to his Isa including 

David says the latest additions to my ISA are a couple of smaller companies funds. This includes Templeton Emerging Markets Smaller Companies and Tellworth UK Smaller Companies fund. He expects smaller companies to make a strong recovery as lockdown measures across the world ease.


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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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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